What happened
3D printing and additive manufacturing startup Xometry (XMTR 0.74%) missed analyst expectations for the fourth quarter and warned of slowing growth in 2023. Investors ran for the exits after the results were posted, sending shares of Xometry down more than 40% on Wednesday.
So what
Xometry has been public since the summer of 2021, seeking to take advantage of the push toward 3D printing, or computer-controlled manufacturing processes that produce three-dimensional objects. Xometry is taking a unique approach, creating a marketplace connecting those in need of 3D-printed products with a network of more than 5,000 suppliers.
But the results in the most recent quarter did not live up to expectations. Xometry reported a fourth-quarter loss of $0.29 per share on revenue of $98.2 million, falling short of the $0.23 per share loss on sales of $104 million that analysts had expected.
Xometry grew sales by 46% year over year in the quarter, but that marks a slowdown for a business that saw sales grow by 75% for the year compared to 2021. In a statement, CEO Randy Altschuler called the current climate "a period of increasingly challenging macroeconomic conditions," and said the company is implementing a plan to cut costs and boost profitability.
The company is realigning its sales efforts to focus on its top 200 accounts, and in January it announced a 6% headcount reduction.
Now what
Xometry expects to generate revenue of $100 million to $102 million in the current quarter, and between $470 million and $480 million for the full year. Both ranges are below the $112 million and $515 million consensus estimates, and the full-year figure would represent growth of "only" about 25%.
That sort of growth is nothing to be ashamed of, but coming into earnings season the stock was arguably priced for perfection, trading at more than 4 times sales. This is a not-yet-profitable company operating in an emerging industry in a difficult environment, but as the price comes down, Xometry is becoming an intriguing option for long-term investors who can handle some level of risk.
