What happened

Shares of ExOne (NASDAQ:XONE) have soared today, up by 20% as of 2:30 p.m. EST on Tuesday after getting a bullish initiation from Wall Street. Stifel kicked off coverage of ExOne with a buy rating while assigning a price target of $20.

So what

Analyst Noelle Dilts believes that the industrials company, which develops 3D printing machines that can handle more-complicated designs and complex parts, will capitalize on rising demand throughout industrial production supply chains. ExOne is a clear leader in binder jetting technology, and the COVID-19 pandemic has accelerated its adoption as companies look to address vulnerabilities that were exposed by the public health crisis.

Illustration of a man touching the words "3D Printing"

Image source: Getty Images.

"Over the past several years, ExOne's team has successfully led a refresh of the company's product portfolio and improved the balance sheet," the analyst wrote in a research note to investors. "The biggest hurdle to the investment case, in our opinion, is increasing competition from more emerging binder jetting players (some of which are very well-capitalized)."

Now what

Despite greater competition, Stifel remains confident that ExOne has a first-mover advantage and an established customer base that should allow it to succeed and grow.

ExOne did not provide specific financial guidance for the fourth quarter, but CEO John Hartner said that the company finished the third quarter with a record backlog and strong customer interest in ExOne's core binder-jetting offerings, while the company has refreshed its product portfolio and boosted liquidity through cost cuts.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.