Desktop Metal, Inc. is an industry-leading developer of additive manufacturing technologies for engineers, designers, and manufacturers all over the world. Founded in 2015 and based out of Burlington, Massachusetts, Desktop Metal has become a leader in the highly competitive 3D printing technology market.
Desktop Metal produces 3D printers that specialize in producing metal, ceramic, or composite parts at speeds up to 20X faster than traditional metal 3D printing methods. They provide a variety of platform solutions and technologies, such as the Production System, an industrial manufacturing solution; the Shop System, a mid-volume binder jetting platform; the X-series platform for serial production binder jet 3D printed metal, ceramic, or composite parts; the Studio System, an office metal 3D printing system; and the Desktop Metal Furnace, which is paired with the Studio System and binder jetting solutions to create turnkey metal additive manufacturing solutions.
Desktop Metal also produces several digital casting solutions, such as the Extreme 8K platform, the Einstein series, and the Envision One platform. Additionally, they provide a range of materials, such as binder jetting materials, photopolymer resins, BMD materials, and bioprinting materials.
Desktop Metal is proud of their accomplishments, with over 1,200 full-time employees and decades of collective experience, they have become a leader in the 3D printing space. Their products are sought after by a variety of industries including automotive, aerospace, healthcare, consumer products, heavy industry, machine design, research, and development.
Desktop Metal, Inc. appears to be performing well, overall, as evidenced by their financials. The company’s debt-to-equity ratio is 28.10, which is higher than the industry average; however, it is still considered within an acceptable range. Their return on assets is -11.76%, indicating the company is less profitable than the industry as a whole. Despite this, their free cashflow of -73.04M is comparable to similar businesses in the industry. Meanwhile, the company’s total cash per share is 0.47, which reflects the company’s ability to pay their liabilities.
The company’s profitability is lagging, with operating margins of -92.72% and profit margins of 0.00%. Additionally, the company’s gross margins come in at 10.49%, which is almost half that of the industry average. As a result of these lower margins, the company’s revenue per share comes in at 0.65, and their total revenue is 206.63M.
Despite these lackluster figures, the company has some strong fundamentals and is a good long-term hold. Their current ratio is 3.79, while the quick ratio stands at 2.22. Their total cash stands at 149.81M, and their total debt is 136.46M. Additionally, their target mean price stands at 2.50, while the target median and target low prices come in at 2.00 and 1.60, respectively.
Overall, Desktop Metal, Inc. appears to be holding steady. Despite weaknesses in profitability and margins, the company has a low debt-to-equity ratio and relatively healthy liquidity. For the long-term investor looking for a good hold stock, Desktop Metal, Inc. could be a viable option.
The company has also managed to remain profitable even during the height of the COVID-19 recession. This success can be attributed to the quality of their products, rapid customer response times, and the agility of their management and product engineering teams. Their rapid growth in the 3D printing market also allowed them to offer attractive payment plans, which helped spur the demand for their products and enabled them to weather the economic downturn.
Additionally, the company has taken the time to focus on expanding their product line. They have committed to providing better quality products at lower prices, increasing the production speed of their metal 3D printing solutions, and expanding the compatibility of their solutions to new platforms and materials. These measures have enabled Desktop Metal to remain competitive, maintain a consistent customer base, and ensure a steady, though slightly slower, growth rate during the recession.
In conclusion, Desktop Metal has managed to remain competitive during the recent recession due to the quality of their products, responsive customer service, and their agility in adjusting their product line to maintain a competitive edge. The company has been able to leverage its full-time employees, decades of collective experience, and 3D printing expertise to become a leader in the industrial 3D printing technology space. With a focus on better quality products, faster production speeds, and new compatible platforms and materials coming down the pipeline, Desktop Metal will remain a top-tier player in the 3D printing industry.
High inflation can quickly erode the value of desktop printing revenue and materials. To maintain the value of their products, Desktop Metal not only has to constantly adjust to changes in the cost of materials, but they also have to tweak their pricing models and experiment with strategies to stay competitive in the market by utilizing software, automation, and other models to ensure their production is efficient and cost-effective. Additionally, Desktop Metal works to stay innovative and develop new applications and technologies for their 3D printing products, so as to remain competitive in ever-evolving markets.
Desktop Metal is also proactive in engaging their customer base to ensure their customers are aware of all the changes and achievements their products have made in the past year, with constant communication, technical support, and product updates. Doing so helps them anticipate the challenges that could arise from high inflation and prepare best practices to mitigate those challenges.
Desktop Metal also works to constantly optimize its supply chain, reducing its cost of production by using local or regional suppliers who can offer lower prices and faster shipping times. By controlling cost in this manner, Desktop Metal can remain agile and adaptive to inflation changes while offering competitive prices.
Overall, Desktop Metal has developed successful strategies to face the challenges posed by high inflation. Through cost optimization, innovative new technologies, and engaging their customer base, they are able to remain competitive in constantly changing markets. Desktop Metal’s success in the face of high inflation reflects the company’s commitment to operational excellence.
Despite the potential advantages of investing in Desktop Metal, Inc., there are several risks associated with this stock. One of the primary risks is that the company is still relatively new and has no long-term track-record of success and stability. Additionally, the 3D printing technology market is highly competitive and volatile, and the company could face stiff competition from larger competitors in the space. Additionally, the company’s profitability and margins remain weak, leaving it vulnerable to market downturns or fluctuations in demand. Finally, the company is heavily dependent upon external sources for much of its materials, making it vulnerable to supply chain issues. As a result, investors should carefully consider all of these factors before investing in Desktop Metal, Inc.
