Xometry initiated with a Sell at Lake Street

Lake Street analyst Troy Jensen initiated coverage of Xometry (XMTR) with a Sell rating and $28 price target, describing the company as "an asset-light version of Proto Labs." Xometry brokers part production from a network of prequalified machine shops and similar to Proto Labs (PRLB), Xometry sells parts that are primarily produced via CNC, injection molding, sheet metal fabrication, and additive manufacturing technologies. However, whereas Proto Labs owns its equipment, Xometry is a part broker and matches buyers to sellers, noted Jensen, whose negative thesis on Xometry is based on a belief that the company primarily brokers parts for extremely low-volume end-part production but will struggle to enter mid, high-volume production markets. He believe consensus estimates throughout 2023 are too high and anticipate downward revisions to 2023 and 2024 forecasts, the analyst added.