Interpreting voxeljet’s Results

Don’t be fooled by voxeljet’s numbers [Source: voxeljet]

voxeljet announced their latest financial results, and the market reacted badly. 

The 3D printer manufacturer produces very large scale devices typically used to create molds for metal or ceramic pours, had their stock drop almost 10% after they announced their results. 

The reason for the drop was due to the fact that they somewhat missed their previously announced financial targets for the quarter. While this would normally be an expected market reaction, I am not so sure this is valid in this case. 

voxeljet is one of the very few 3D printer manufacturers having publicly traded stock, thus they often garner a lot more attention than you’d see for other manufacturers. Even worse, they are often placed on the same lists as the other publicly traded 3D printer companies, most notably 3D Systems and Stratasys, both of which are enormously larger than voxeljet. 

To put that in perspective, voxeljet’s current market capitalization (the sum of the value of all their shares) is USD$66M. Meanwhile, Stratasys’ is USD$1,070M and 3D Systems’ is USD$2,070M, 31X larger. 

voxeljet is a relatively small company, selling large, expensive niche products in a niche industry. Their sales are low in terms of units. For example, they say: 

“Revenues from our Systems segment, which focuses on the development, production and sale of 3D printers, decreased 25.9% to kEUR 1,883 in the second quarter of 2018 from kEUR 2,542 in last year’s second quarter. This was mainly due to a lower number of printer sales during the quarter. The Company delivered one new 3D printer and one used and refurbished 3D printer in the second quarter of 2018, compared to three new printers delivered in last year’s second quarter.”

Wait, they sold only two units in the quarter? That’s what you get in this scenario. 

Consider what effect on their results a SINGLE additional sale might have had. Instead of two machines, perhaps they sold three. That would put a notable bump in their financial statistics. That variability makes me giggle when I see the decimal points in their results. What if they sold TWO additional machines? What would the market do?

In reality the fate of their stock price seems to be utterly dependent on the vagaries of individual sales events. What if a buyer was late in their purchase and pushed their statistic to the next quarter? 

This is vastly different than analyzing a company that sells thousands of units per month, where the margin of error in analysis is slim. With voxeljet a single event could swing stock prices to and fro. 

I’d try to avoid the hype and look deeper at the company and its operations to see what’s really going on. 

Via Seeking Alpha and voxeljet

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