This year, macroeconomic headwinds are expected to create hindrances in the tech industry. Therefore, I think it might be ideal to avoid Nano Dimension Ltd. (NNDM) and Shapeways Holdings, Inc. (SHPW), considering their weak fundamentals.

Beyond the concerns about macroeconomic conditions, the technology industry faces global challenges ranging from geopolitical tensions to supply chain uncertainties, ongoing semiconductor concerns, raw material shortages, and the enactment of new legislation and trade restrictions.

This year, all these issues will likely top the priority lists of many prominent tech companies as they reassess partnerships, suppliers, and the markets in which they do business.

Moreover, Forrester is forecasting that the emerging macroeconomic environment this year will lead to US tech spending growth of only 5.4%, which is a drop from 7.4% growth in 2022.

In addition, the technology industry has experienced multiple rounds of layoffs as a result of sluggish sales growth in the face of declining demand. In addition, tech companies that heavily depend on advertising revenue are facing difficulties because digital advertisers are cutting back on their spending due to inflation.

Coming to the 3D printing industry, despite its potential, the growth of the 3D printing market is hindered by significant barriers. The high initial cost, particularly for individual users, and the expensive software tools required for operation result in an inflated manufacturing process.

Take a look at the stocks mentioned above:

Nano Dimension Ltd. (NNDM)

Headquartered in Ness Ziona, Israel, NNDM provides additive electronics in Israel and internationally. The company offers 3D printers, comprising DragonFly IV, that produces Hi-PEDs by depositing proprietary conductive and dielectric substances, as well as integrating in-situ capacitors, antennas, coils, transformers, and electromechanical components.

NNDM’s trailing-12-month gross profit margin of 42.83% is 13.3% lower than the 49.43% industry average. Its trailing-12-month asset turnover ratio of 0.03x is 94.6% lower than the 0.62x industry average.

NNDM’s revenue came in at $12.10 million during the fourth quarter that ended December 31, 2022. Its operating loss came in at $72.69 million. The company’s loss for the year came in at $87.90 million, whereas its loss per share came in at $0.34.

The company failed to surpass the EPS estimates in three of the trailing four quarters, which is disappointing.

The stock has declined 26.9% over the past nine months to close its last trading session at $2.50. It also has a 24-month beta of 1.06.

NNDM’s POWR Ratings reflect this bleak outlook. The stock has an overall F rating, equating to a Strong Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

NNDM is also graded a D in Quality, Sentiment, Value, and Stability. It is ranked #5 among six stocks in the F-rated Technology – 3D Printing industry.

In addition to the POWR Ratings stated above, NNDM’s rating for Growth and Momentum can be seen here.   

Shapeways Holdings, Inc. (SHPW)

SHPW facilitates the design, manufacture, and sale of 3D-printed products in the United States, Europe, and internationally.

SHPW’s trailing-12-month asset turnover ratio of 0.38x is 52.1% lower than the 0.80x industry average. Its trailing-12-month cash per share of 0.62x is 69.7% lower than the 2.04x industry average.

During the fiscal fourth quarter that ended December 31, 2022, SHPW’s revenue came in at $8.71 million. Its gross profit decreased 8% year-over-year to $3.56 million, whereas its net loss increased 193.8% year-over-year to $6.96 million. Also, net loss per share attributable to common stockholders increased 225% year-over-year to $0.13.

SHPW’s EPS is expected to decline 44% year-over-year to negative $0.13 for the fiscal first quarter that ended March 2023. Its revenue is expected to come in at $7.80 million.

The stock has plunged 57.1% over the past nine months to close the last trading session at $0.37. The stocks have a 24-month beta of 1.17.

It’s no surprise that SHPW has an overall rating of D, which translates to a Sell in our POWR Ratings system.

SHPW also has an F grade for Quality and a D in Stability. It is ranked #4 in the same industry.

Click here to see the POWR Ratings of SHPW (Growth, Value, Sentiment, and Momentum).

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NNDM shares were trading at $2.63 per share on Monday morning, up $0.13 (+5.20%). Year-to-date, NNDM has gained 14.35%, versus a 8.30% rise in the benchmark S&P 500 index during the same period.

About the Author: Nidhi Agarwal

Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities. More...

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