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There's a brand-new player on Wall Street: 3D printing company ExOne (NASDAQ: XONE ) took to the market last week, and based on how far it has already advanced, some analysts are calling it the best IPO of 2013.
Well, to be fair, 2013 just started. Still, let's try to find out what exactly makes ExOne tick, how it could be profitable, and whether it has what it takes to make a prolonged splash in the market.
Inside the company
ExOne came about in 2005 as the result of a spinoff. Its father company, Extrude Hone, is known for developing "nontraditional machining processes" in arenas such as metalworking and carbide cladding, among others.
With technology trends growing more toward 3-D printing, ExOne has adapted to keep up with the times by providing supplies and services for 3-D printing in sand, metal, and glass. The company collaborates with the German start-up Genesis, which created the original prototype for 3-D printing out of sand. In the realm of glass and metal, ExOne has exclusive rights to MIT's 3-D printing processes and has received more than $14 million in contracts to further its research.
ExOne might have some strong tools in its arsenal, but does that make it a good stock? The 3-D printing company has already pulled off a phenomenal IPO, rising 31% since its debut on Feb. 7. After last year's Facebook IPO debacle, this news is a welcome relief for weary investors.
However, ExOne has a long way to go before it can reach the heights of its peers. The uber-successful 3-D printers Stratasys (NASDAQ: SSYS ) and 3D Systems (NYSE: DDD ) have market caps of close to $4 billion, dwarfing ExOne's comparatively petite $240 million. However, Stratasys and 3D Systems both came from even smaller IPOs -- the former came out the gate at around $2 a share in 1994, while the latter started out at close to $8 in 1988 -- and both have since reached more than 10 times their original prices. ExOne's starting price of $24.24 could be a promising sign for the new stock.
Although it will take some time to tell for sure whether ExOne is a solid investment, its strategy appears to be solid. The company is striking while the 3-D printing iron is white hot on Wall Street, hoping to reap the same benefits as other companies in its industry. If it plays its cards right and puts forth a solid financial statement or two, it could become a stock market darling.
3D Systems is at the leading edge of a disruptive technological revolution, with the broadest portfolio of 3-D printers in the industry. However, despite years of earnings growth, 3D Systems' share price has risen even faster, and today the company sports a dizzying valuation. To help investors decide whether the future of additive manufacturing is bright enough to justify the lofty price tag on the company's shares, The Motley Fool has compiled a premium research report on whether 3D Systems is a buy right now. In our report, we take a close look at 3D Systems' opportunities, risks, and critical factors for growth. You'll also find reasons to buy or sell, and receive a full year of analyst updates with the report. To start reading, simply click here now for instant access.