The ExOne Company (XONE) manufactures and sells 3D Printing machines to industrial customers internationally. It also sells associated products, replacement parts, technical support and training services, making it one of the more popular companies in the world. As the 3D printing industry gains momentum this year, XONE is expected to capitalize on the trend to become a leading supplier of 3D printing machines globally.

In part because global supply channels have been disrupted by the COVID-19 pandemic, 3D printing is expected to replace traditional production methods, which require imports from foreign countries. With improved cost efficiency and lower waste, the 3D printing industry is expected to support global industrial and economic recovery, thereby playing a key role in pulling the world  out of recession.

The 3D printers’ market is expected to grow at a CAGR of 17.9% over the next seven years to reach $46.40 billion by 2027. This bullish outlook has helped XONE gain 201% year-to-date. This, coupled with several other factors, has earned the stock a “Strong buy” rating in our proprietary rating system.

Here is how our proprietary POWR Ratings system evaluates XONE:

Trade Grade: A

XONE is currently trading above its 50-day and 200-day moving averages of $13.81 and $11.83 respectively, indicating a golden-cross uptrend. The stock has gained 163.2% over the past month, reflecting solid short-term bullishness.

XONE received a commercial license agreement from the U.S. Department of Energy’s Oak Ridge National Laboratory yesterday. The license allows the company to print 3D parts in aluminum-infiltrated boron carbide; this has applications in shielding equipment and neutron related research.

On January 12, the company launched an online estimating tool to determine the cost of metal 3D printing for production. As 3D printing garners popularity around the world, this feature should allow XONE to become a widely used tool to determine and compare cost effective production strategies worldwide.

XONE’s revenues have increased 66% year-over-year to $17.40 million in the third quarter ended September 30, 2020. This can be attributed to 162.5% increase in 3D printing machines sales. The company’s cash and cash equivalents balance have increased 97.5% sequentially to $39.90 million.

Buy & Hold Grade: A

In terms of proximity to 52-week high, which is a key factor that our Buy & Hold Grade considers , XONE is well-positioned. It is currently trading just 1.5% below its 52-week high of $28.99, which it hit yesterday.

XONE has gained 177% over the past three years, which can be attributed to its impressive revenue growth. The company’s revenues have increased at a CAGR of 4.4% over the past three years, and at a CAGR of 8.3% over the past five years. But its total assets have risen only slightly over the past three years.  The 3D printing industry has been one of the most innovative segments in the technology sector, with the capacity to transform the industrial sector. The rising popularity of this industry has driven XONE’s performance over the past few years.

Peer Grade: A

XONE is currently ranked #4  of 6 stocks in the Technology – 3D Printing industry. Other popular stocks in this space are Proto labs, Inc. (PRLB), 3D Systems Corporation (DDD) and Materialise NV (MTLS).

PRLB, DDD and MTLS have gained 110%, 226.8% and 252.2%, respectively, over the past year. XONE has returned 280.8% over this period.

Industry Rank: C

The Technology – 3D Printing industry is currently ranked #105  of 123 StockNews.com industries. Companies operating in this sector focus on delivering printing services for design-to-manufacturing solutions around  the world.

This industry has the potential to redefine  major industries, such as the aerospace, automotive and medical sectors, to name a few. However, technological complexities have slowed down its growth rate. Also, as major economies around the world are currently focused on mass coronavirus vaccine deployment and the revival of industrial operations, the prospects for the 3D printing industry are likely to be tempered in the near term.

Overall POWR Rating: A (Strong Buy)

XONE is rated “Strong Buy” due to its solid short- and long-term bullishness, impressive financials and growth momentum, as determined by the four components of overall POWR Rating.

Bottom Line

As one of the top five 3D printing companies in the world, XONE should grow significantly in tandem with the industry’s boom. Also, XONE’s impressive financial results have been supporting its price performance, making it a stock with plenty of upside.

XONE has an average broker rating of 1.67, indicating favorable analyst sentiment. Of three  Wall Street analysts that rated the stock, 1 rated it “Strong Buy”. Analysts expect XONE’s EPS to rise 30.5% in fiscal 2021, and at a rate of 46.5% per annum over the next five years. The company has an impressive earnings surprise history, as it surpassed the Street’s EPS estimates in three of trailing four quarters. A consensus revenue estimate of $65.40 million for the current year represents an 11.5% rise from the same period last year.

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XONE shares were trading at $26.95 per share on Wednesday afternoon, down $1.61 (-5.64%). Year-to-date, XONE has gained 183.98%, versus a 0.26% rise in the benchmark S&P 500 index during the same period.

About the Author: Aditi Ganguly

Aditi is an experienced content developer and financial writer who is passionate about helping investors understand the do’s and don'ts of investing. She has a keen interest in the stock market and has a fundamental approach when analyzing equities. More...

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