The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Desktop Metal (NYSE: DM) and the rest of the custom parts manufacturing stocks fared in Q2.
Onshoring and inventory management–themes that grew in focus after COVID wreaked havoc on global supply chains–are tailwinds for companies that combine economies of scale with reliable service. Many in the space have adopted 3D printing to efficiently address the need for bespoke parts and components, but all companies are still at the whim of economic cycles. For example, consumer spending and interest rates can greatly impact the industrial production that drives demand for these companies’ offerings.
The 4 custom parts manufacturing stocks we track reported a mixed Q2. As a group, revenues missed analysts’ consensus estimates by 3.1% while next quarter’s revenue guidance was 1.1% below.
Luckily, custom parts manufacturing stocks have performed well with share prices up 24.1% on average since the latest earnings results.
Weakest Q2: Desktop Metal (NYSE: DM)
Originating from a research lab at MIT, Desktop Metal (NYSE: DM) offers 3D printers, production materials, and software to many industries.
Desktop Metal reported revenues of $38.93 million, down 26.9% year on year. This print fell short of analysts’ expectations by 14.4%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ EBITDA and EPS estimates.
“Since the beginning of 2022, Desktop Metal has worked tirelessly to align our cost structure with macroeconomic realities, making hard decisions about the business. By the end of Q1 we had delivered nine quarters of non-GAAP opex reduction and brought our cash burn down dramatically. I am proud of the progress we have shown,” said Ric Fulop, Founder and CEO of Desktop Metal.
Desktop Metal delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. The stock is down 47% since reporting and currently trades at $2.60.
Read our full report on Desktop Metal here, it’s free.
Best Q2: Proto Labs (NYSE: PRLB)
Pioneering the concept of online quoting and manufacturing for custom prototypes and low-volume production parts, Proto Labs (NYSE: PRLB) offers injection molding, 3D printing, and sheet metal fabrication for manufacturers in various industries.
Proto Labs reported revenues of $125.6 million, down 3.9% year on year, outperforming analysts’ expectations by 3.3%. The business had an exceptional quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Proto Labs delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 60.6% since reporting. It currently trades at $44.
Is now the time to buy Proto Labs? Access our full analysis of the earnings results here, it’s free.
3D Systems (NYSE: DDD)
Founded by the inventor of stereolithography, 3D Systems (NYSE: DDD) engineers, manufactures, and sells 3D printers and other related products to the aerospace, automotive, healthcare, and consumer goods industries.
3D Systems reported revenues of $112.9 million, down 8.8% year on year, falling short of analysts’ expectations by 1.7%. It was a softer quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
3D Systems delivered the weakest full-year guidance update in the group. Interestingly, the stock is up 35.7% since the results and currently trades at $4.60.
Read our full analysis of 3D Systems’s results here.
Stratasys (NASDAQ: SSYS)
Born from the Founder’s idea of making a toy frog with a glue gun, Stratasys (NASDAQ: SSYS) offers 3D printers and related materials, software, and services to many industries.
Stratasys reported revenues of $140 million, down 13.6% year on year. This result met analysts’ expectations. Overall, it was an exceptional quarter as it also recorded an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Stratasys scored the highest full-year guidance raise among its peers. The stock is up 47% since reporting and currently trades at $12.33.
Read our full, actionable report on Stratasys here, it’s free.
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