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A New Stock to Watch in 3-D Printing

Full-year revenue for fiscal 2012, reported at the end of March, came in at $28.7 million, an increase of nearly 88% from the results seen in 2011. ExOne posted a net loss of $10.2 million after the $8 million loss seen in 2011, but the company is looking for 2013 revenue to improve by as much as 80%.

If these estimates prove accurate, full-year revenue would come in at roughly $50 million. Most of this revenue is expected to come during the third and fourth quarters, so we could start to see something of a turnaround period this year for the company.

ExOne expects to achieve $100 million in revenue in the next three years, The fundamentals suggest this is a company to watch as a growing and increasingly competitive member of the sector.


ExOne is scheduled to release its first quarter 2013 results on May 14, so we are likely to see some volatility in the company's stock value in the near term.

Conclusion:

Sector valuations are still relatively expensive, with more established companies like 3D Systems showing P/E values above 90. Many investors will argue that this is a lot to pay for companies that have yet to establish a proven track record.

To be sure, 3-D printing is for real, and it is fair to say that we can believe the hype. But when looking for investment opportunities, the prudent move is to watch near-term developments in the sector rather than jumping in with both feet at current levels.

Investors will need to be cautious when looking to buy into these companies. 3-D printing is still in its infancy, and there is a good amount of competition from non-public companies (such as MakerBot).

Newcomer ExOne has seen a strong performance this year while some of its more-established sector competitors have not fared quite as well. The ExOne earnings release on May 14 will give some guidance and help determine whether or not the stock's initial rally is set to continue into the latter part of this year.

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Richard Cox is a university teacher in international trade and finance. His articles appear on a variety of Web sites, including MarketBulls.net, Seeking Alpha, FX Street and others. Investing strategies are based on technical and fundamental analysis of all the major asset classes (stock indices, currencies and commodities). Trade ideas are generally based on time horizons of one to six months.
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