What happened
Shares of industrial 3D printer maker Desktop Metal (DM 0.64%) stock jumped after the company beat analyst sales projections this morning, and are up 11% as of 11 a.m. ET.
Wall Street had forecast that Desktop Metal would book sales of only $49.6 million in the fourth quarter of 2021. Instead, the company reported sales of $56.7 million -- and then followed that up with a prediction of better-than-expected sales in fiscal 2022.
Image source: Getty Images.
So what
That's the good news. Now here's the bad:
Sales growth at Desktop Metal has been impressive, rising 123% year over year in Q4 (including revenue from the company's acquisition of ExOne last year) and rising 583% (to $112.4 million) for all of 2021. Profits, however, were entirely missing, with Desktop Metal reporting $71.2 million in losses for the quarter, and $240.3 million for the year.
Desktop didn't even bother to break out its quarterly loss in per-share terms, but for the year, the company booked losses of $0.92 per share -- more than four times the $0.22-per-share loss booked in 2020.
Now what
Nevertheless, investors are bidding Desktop Metal shares higher today. Why?
Well, for one thing, management didn't emphasize the losses in its reporting, but rather its "record total revenue, organic revenue, and gross margins" (of 22% for the quarter, but only 16% for the year). For another, management promised to keep the growth going with new guidance predicting full-year 2022 sales of $260 million.
If Desktop Metal hits that number, it will grow sales 131% this year, and eclipse analyst predictions of $253 million in 2022 sales besides. As predictions go, it's not as good as a profit -- but it seems to be good enough for investors today.
