Why ExOne Shares Plunged

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of three-dimensional-printer specialist The ExOne Company (NASDAQ: XONE  ) sank 11% today after its quarterly results and outlook disappointed Wall Street.

So what: The stock has rocketed over the past year on excitement over 3-D printing, but today's first-quarter results -- loss of $0.20 per share on revenue of $7.9 million -- coupled with less than stellar guidance is forcing investors to sober up a bit. Management cited weakness in Europe for the market-missing report, reinforcing concerns that ExOne's relative lack of diversification -- both from a product and geographical standpoint -- will always yield more volatile results than other plays in the space.

Now what: Management said it still sees 2013 revenue of $48 million-$52 million, with about two-thirds of that expected to fall in the latter half of the year, versus the consensus of $53.3 million. "We are steadily advancing our growth strategy," Chairman and CEO Kent Rockwell said. "This includes the expansion of our manufacturing capacity in Germany, upgrading our PSCs and working to establish a more robust PSC network." With the stock still up about 65% over the past six months alone and trading at a price to sales multiple of about 20, however, I'd wait for even more pullback before buying into that bull talk.

Interested in more info on ExOne? Add it to your watchlist.


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