Why ExOne's Shares Jumped

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 ExOne  (NASDAQ: XONE  ) jumped as much as 12% today after an analyst gave the stock a positive review.

So what: FBR Capital Markets released a research note stating that high-profile auto companies are working with the materialization systems company and could help boost demand in the future. According to the report, ExOne expects mass production of parts like air-cooling systems within two or three years, although it wouldn't take place at ExOne-owned facilities.  

Now what: Keep in mind that pops and drops driven by analyst upgrades often fizzle out over time, so today's report isn't a great buying opportunity in and of itself. Investors also need to remember that ExOne had just $9.2 million in revenue last quarter, although that could grow quickly if the company partners with big auto companies.

I'd rather wait to see how much progress was made in the third quarter and what management has to say about the future. This is already a high-priced stock and at the end of the day financial performance will drive the stock, not analyst upgrades or downgrades.

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