What happened
Ending October where they began, shares of Velo3D (VLD -2.29%) were ho hum, while the S&P 500 rocketed 8% higher. Last month, however, the 3D printing stock was far from inert. According to data from S&P Global Market Intelligence, Velo3D's stock plunged 48.5%.
After the company reported disappointing third-quarter 2022 earnings -- and cut its 2022 forecast -- investors steadfastly clicked the sell button and exited their positions.
So what
Failing to meet analysts' revenue expectations of $24.2 million, Velo3D reported $19.1 million on the top line. And it wasn't only the top of the income statement that weighed heavily on investors' minds. Whereas Velo3D reported a gross profit of $1.5 million in Q3 2021, a delay in system shipments contributed to the company booking a gross loss of $100,000 in the recently completed quarter. Furthermore, Velo3D reported a non-GAAP loss per share of $0.12, slightly worse than the $0.11 loss per share that analysts had expected.
Besides the company's recent performance, management's inauspicious forecast for the remainder of 2022 also weighed heavily on investors' minds. Downwardly revising its 2022 forecast, management stated that it now expects to report 2022 revenue of $75 million to $80 million -- lower than the $89 million it had originally forecast.
Addressing the reduced 2022 guidance on the company's conference call, Benny Buller, Velo3D's CEO, said, "The adjustment to our 2022 revenue guidance is not fundamental or demand related, but entirely due to the potential impact of the factors [shipment delays and supply chain uncertainty] I just discussed."
Now what
While the headline sales figure reported in the company's Q3 2022 earnings may have disappointed investors, it's important to recognize some perspective: Velo3D's Q3 2022 revenue represented an impressive 119% year-over-year increase. It may have come up short of Wall Street's expectations, but analysts' estimates aren't the only thing that matters.
There were some bright spots in the company's financials as well that investors may have missed. Velo3D secured $27 million in bookings during the last quarter, resulting in the company's backlog growing to $66 million. For context, Velo3D reported $18 million in new orders during Q2 2022, which led to the company ending the quarter with a backlog of $55 million.
This 3D printing company may not be printing money right now, but it's too early to dismiss it altogether. The course of true growth stocks like Velo3D rarely runs smooth, and it's a little premature to chalk up the company's recent quarter as a sign that its future is hopeless.
