Take the Long-Term View on ExOne Co.

ExOne's first quarter results disappointed Wall Street, but I still love its long-term story.

May 15, 2014 at 8:31PM

For shareholders of The ExOne Company (NASDAQ:XONE), days like today are hard to stomach.

Shares of ExOne plunged more than 16% this morning after the additive manufacturing specialist's first-quarter results badly missed expectations. Revenue fell 8% year over year to $7.3 million, which translated to a wider net loss of $0.38 per share. Analysts, on average, were looking for a net loss of just $0.12 per share on sales of $9.87 million.

Now, with ExOne having officially fallen short of estimates in every single quarter since going public early last year, shares are trading within spitting distance of a new 52-week low.

Perspective is in order
Then again, quarters like this are exactly why ExOne avoids providing quarterly guidance. 

Remember, ExOne focuses on selling high-end industrial 3-D printers with an exceedingly large per-unit price tag. In short -- and this early in ExOne's long-term story -- this means dealing with long sales cycles and chunky quarterly revenue.

To be sure, one-third of last quarter's revenue -- or $2.4 million -- came from the sale of just three 3-D printers, including one S-Max unit and one S-15 machine sold to European customers, and a single M-Flex unit sold in the United States. By comparison, last year's first quarter saw five machines sold -- including four 3-D printers and one laser machine -- for $4.2 million.

But this doesn't mean ExOne is a failing business.

First, keep in mind ExOne's first-quarter sales from 3-D printed products, materials, and production service centers actually rose by 37% year over year to $3.7 million. In addition, while ExOne consistently opts not to predict its quarterly performance, as analysts insist on doing, it continues to expect full-year 2014 revenue to grow 40%-50% to a range of $55 million-$60 million -- the mid-point of which sits just above analysts' consensus for 2014 sales of $56.98 million.

To be fair, ExOne did reduce its 2014 gross margin guidance to between 40% and 43%, down from the previous expected range of between 43% and 46%. But ExOne also explained that it's the result of developmental costs associated with its new ExCast initiative, which could generate an additional $50 million to $60 million in revenue next year alone. And that's why fellow Fool Blake Bos recently insisted ExCast is "of utmost importance for the company to succeed over the long-term, satisfy investor's expectations, and drive the stock price higher."

Foolish takeaway
Don't get me wrong. I'll readily admit it hurts to see stocks we recommend fall this much in a single day. But in ExOne's case, I see nothing to indicate its long-term story is broken. As a result, if shares continue to remain depressed over the next few days, I intend to add ExOne to my personal portfolio as soon as the Fool's trading restrictions allow.

China is no match for Star Trek tech
As US companies discovered "outsourcing," China rose to manufacturing dominance in the 1990s and 2000s on a wave of cheap labor. But do you know what's cheaper than cheap labor? No labor! From 2014 on, manufacturing will increasingly be done with the push of a 3-D printing button, as more and more companies manufacture with the ease of a Star Trek captain ordering the creation of "Tea, Earl Grey, Hot." Click here for The Motley Fool's exclusive report on the American companies that could make it happen. Click here... now!

Steve Symington has no position in any stocks mentioned. The Motley Fool recommends ExOne. The Motley Fool owns shares of ExOne. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers