Can ExOne Stand up to Its 3-D Peers?

Tomorrow, ExOne (XONE) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

ExOne went public barely three months ago, but already, it has made a big splash in the popular 3-D printing space. But does the company have what it takes to stand up to already harsh competition in the highly promising industry? Let's take an early look at what's been happening with ExOne over the past quarter and what we're likely to see in its quarterly report.

Stats on ExOne

Source: Yahoo! Finance.

Will ExOne's earnings really go in the wrong direction this quarter?
In recent months, analysts have reduced their expectations about ExOne's earnings prospects, widening their loss estimates by $0.02 per share for the first quarter and cutting more than 40% off their full-year 2013 calls. Yet the stock simply continues to soar, jumping nearly 60% since its early February IPO.

ExOne has already jumped out to great success in its recent debut, as it announced its fourth-quarter earnings just six weeks ago. The company managed to beat expectations by boosting revenue substantially, reversing a year-ago loss by posting a modest profit. By specializing in large-scale industrial objects, ExOne has done its best to differentiate itself from 3D Systems (DDD -0.86%) and its more consumer-focused printer line. Moreover, with its ability to print metal objects, it hopes to stand out versus Stratasys (SSYS -0.20%), which has found success serving the same kinds of industrial businesses that ExOne is targeting.

ExOne definitely isn't an investment for the meek. Even during that successful fourth quarter, ExOne only sold eight of its printing machines, and it has only managed to sell 21 printers over the past three years. Even though it has major companies as customers, including Ford and Caterpillar, ExOne's vulnerability to a poor sales quarter is undeniable.

Last month, CEO Kent Rockwell said that he's hoping to help ExOne reach gross margins of 50% in the next three years as part of an overall mission to push revenue to $100 million annually. With plans to move into South America and Asia, ExOne hopes to find faster growth that can help it bolster sales and profits more rapidly than staying closer to home.

In ExOne's quarterly report, watch to see if the company can defy skeptical analysts once more by posting better revenue that could lead to yet another surprise profit. In the end, ExOne needs to become the premier industrial 3-D printer company, and it will need to use its printer-size advantage to maximize the opportunity it has against 3D Systems and Stratasys.

Click here to add ExOne to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.