Voxeljet (VJET 3.46%) will release its quarterly report on Thursday, and investors have absolutely hammered the 3-D printing company, sending its stock below its first-day IPO price. Even though much larger players 3D Systems and Stratasys (SSYS -0.28%) have also gotten punished, the question for Voxeljet is whether it can demonstrate a competitive advantage over both those first-mover companies as well as newer entrants to get its shares moving back in the right direction.
Voxeljet has chosen to focus on the industrial segment of the 3-D printing industry, which involves more expensive printers catering to larger companies that can afford to make big capital investments. Yet Voxeljet is far from the only company with ambitions in that direction, as ExOne (XONE) has a similar focus, while both 3D Systems and Stratasys have sought to stay diversified by serving both consumer applications and industrial customers. Let's take an early look at what's been happening with Voxeljet over the past quarter and what we're likely to see in its report.
Voxeljet's VX2000 printer. Source: Voxeljet
Stats on Voxeljet
|
Analyst EPS Estimate |
$0.01 |
|
Year-Ago EPS |
$0.00 |
|
Revenue Estimate |
$4.67 million |
|
Change From Year-Ago Revenue |
61% |
|
Earnings Beats Since Going Public |
1 (out of 1) |
Source: Yahoo! Finance
How fast can Voxeljet earnings grow?
In recent months, analysts have gotten less optimistic about the ramp-up in Voxeljet earnings, cutting their fourth-quarter estimates in half and reducing their full-year 2014 projections by 30%. The stock has gotten pummeled, falling 28% since mid-December.
Voxeljet's third-quarter results didn't give many hints of upcoming trouble for the 3-D printing company, as revenue jumped 77% and Voxeljet reversed a year-ago loss with a solid profit for the quarter. Gross margins improve by more than 7 percentage points, with most of the growth coming from the fact that Voxeljet sold three new 3-D printers in this year's quarter compared to just two printers last year. Services segment revenue also gained, with on-demand parts sales climbing 12%.
But shortly after those results came out, analysts at Citron Research issued a scathing review of Voxeljet's business. Pointing to the lumpy nature of sales of its high-cost printers, Citron took issue with the accounting treatment of some of Voxeljet's sales, arguing that some of the transactions appeared to involve loans and that Voxeljet sold printers at a discount. Despite there being reasonable justifications for those moves, Voxeljet shares took a big hit on the vote of no confidence. Throughout the quarter, Citron hammered several companies in the 3-D space, including 3D Systems and bioprinter specialist Organovo Holdings.
Some of Voxeljet's moves, however, aren't as easily explained. For instance, in December, Voxeljet bought its headquarters and service center in Germany for about $13.7 million, using up about 20% of the money it raised in its initial public offering. Given the need for fast growth, it's unclear why continuing to lease the facility wouldn't have made more sense, saving that cash for better use elsewhere.
Moreover, turbulence among other 3-D printing companies has led many to question how well Voxeljet can do to buck the trend. Warnings from 3D Systems, ExOne, and Stratasys helped drive their shares lower over the past few months, and it has called the entire industry's prospects into question. With new competition coming from a variety of different directions, Voxeljet can't afford to waste any time in its quest to stake its claim in the high-growth industry.
In the Voxeljet earnings report, watch to see how the company addresses issues raised by skeptical analysts, and also look closely at reported sales for the quarter to get a comfort level on how the company is accounting for its revenue. In particular, with its new VX2000 printer, Voxeljet needs to demonstrate interest in newer models as the industry evolves. As fiercer competition comes to the space, Voxeljet has to come up with a strong forward-looking strategy to capture its share of growth from the 3-D printing industry.
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