Desktop Metal (DM) AI Stock Analysis

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Desktop Metal

(NYSE:DM)

38Underperform

Desktop Metal's overall stock score is heavily impacted by its challenging financial performance, characterized by negative profitability and liquidity issues. Technical indicators suggest continued bearish momentum, and valuation metrics reflect the company's struggles with profitability. The lack of substantial updates from recent earnings calls contributes to a lack of positive outlook. The combination of these factors results in a low stock score, indicating significant risks and challenges ahead for the company.

Desktop Metal (DM) vs. S&P 500 (SPY)

Market Cap

$163.71M

Dividend YieldN/A

Average Volume (3M)2.34M

Price to Earnings (P/E)―

Beta (1Y)0.30

Revenue Growth-14.97%

EPS Growth22.83%

CountryUS

Employees950

SectorTechnology

Sector Strength40

IndustryComputer Hardware

Share Statistics

EPS (TTM)-6.58

Shares Outstanding33,341,420

10 Day Avg. Volume6,546,095

30 Day Avg. Volume2,343,314

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.44

Price to Cash Flow (P/CF)-1.20

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$5.00

Price Target Upside0.81% Upside

Rating ConsensusHold

Number of Analyst Covering2

Desktop Metal Business Overview & Revenue Model

Company DescriptionDesktop Metal, Inc. is an innovative technology company that operates within the additive manufacturing industry. Specializing in metal 3D printing solutions, the company offers a comprehensive suite of products designed for rapid prototyping, mass production, and specialized industrial applications. Its core products include a range of 3D printers, materials, and software solutions that cater to various sectors such as automotive, aerospace, healthcare, and consumer goods.

How the Company Makes MoneyDesktop Metal primarily generates revenue through the sale of its 3D printing systems and related consumables such as proprietary printing materials. The company also earns from providing software solutions that enhance the usability and efficiency of their printing systems. Additionally, Desktop Metal offers maintenance and support services, generating recurring revenue through service contracts with customers. Significant partnerships with major industrial players and strategic acquisitions further bolster its market presence and revenue growth by expanding its product offerings and customer base.

Desktop Metal Financial Statement Overview

Summary

Desktop Metal faces significant financial hurdles with declining revenues, persistent losses, and negative cash flows. While the balance sheet shows some strength in asset coverage, the negative profitability and liquidity position pose challenges. Continued focus on improving operational efficiency and cash flow generation is critical for future stability.

Income Statement

Negative

Desktop Metal's income statement shows significant challenges with profitability. The TTM gross profit margin is negative due to higher costs than revenues, and the net profit margin is deeply negative, indicating substantial losses. Revenue has declined year-over-year, contributing to a weak revenue growth trajectory. The EBIT and EBITDA margins are also negative, pointing to operational inefficiencies.

Balance Sheet

Negative

The balance sheet reveals a moderate level of risk with a debt-to-equity ratio indicating some leverage but not excessively so. The return on equity is negative, reflecting ongoing losses. The equity ratio is relatively healthy, suggesting a strong equity position relative to assets. However, decreased stockholders' equity over recent periods raises concerns about sustainability.

Cash Flow

Negative

Cash flow analysis highlights ongoing liquidity challenges. The operating cash flow to net income ratio is negative, emphasizing cash outflows from operations. Free cash flow remains negative, indicating insufficient cash generation to cover capital expenditures and operational needs. The free cash flow growth rate is also negative, showing deteriorating cash flow trends.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
168.28M	189.70M	209.02M	112.41M	16.47M	34.58M
	Gross Profit
-20.94M	-10.09M	15.07M	18.29M	-15.05M	13.71M
	EBIT
-213.74M	-323.22M	-232.96M	-175.87M	-92.06M	-837.00K
	EBITDA
-244.29M	-268.66M	-689.34M	-243.84M	-26.13M	-94.99M
	Net Income Common Stockholders
-365.51M	-323.27M	-740.34M	-240.33M	-90.43M	-557.00K
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
93.27M	84.47M	184.53M	269.59M	595.39M	14.87M
	Total Assets
302.10M	458.00M	754.35M	1.39B	641.91M	33.03M
	Total Debt
0.00	143.95M	136.32M	19.98M	13.02M	600.00K
	Net Debt
93.27M	60.11M	60.03M	-45.04M	-470.51M	-14.27M
	Total Liabilities
10.59M	216.35M	226.84M	138.25M	32.66M	7.66M
	Stockholders Equity
92.32M	241.65M	527.50M	1.25B	609.25M	25.38M
Cash Flow		Free Cash Flow
-77.40M	-117.76M	-193.05M	-183.95M	-82.00M	-1.78M
	Operating Cash Flow
-76.54M	-115.00M	-181.53M	-155.05M	-80.58M	-1.01M
	Investing Cash Flow
-419.00K	117.27M	81.57M	-427.29M	-36.98M	-777.00K
	Financing Cash Flow
-825.00K	534.00K	113.79M	166.55M	534.92M	600.00K

Desktop Metal Technical Analysis

Technical Analysis Sentiment

Positive

Last Price4.96

Price Trends

50DMA

2.62

Positive

100DMA

3.09

Positive

200DMA

3.85

Positive

Market Momentum

MACD

0.67

Negative

RSI

79.76

Negative

STOCH

95.30

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DM, the sentiment is Positive. The current price of 4.96 is above the 20-day moving average (MA) of 3.02, above the 50-day MA of 2.62, and above the 200-day MA of 3.85, indicating a bullish trend. The MACD of 0.67 indicates Negative momentum. The RSI at 79.76 is Negative, neither overbought nor oversold. The STOCH value of 95.30 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DM.

Desktop Metal Risk Analysis

Desktop Metal disclosed 60 risk factors in its most recent earnings report. Desktop Metal reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Desktop Metal Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MTLS	63 Neutral	$245.72M	16.95	5.60%	―	4.24%	100.00%
NNDM	59 Neutral	$311.32M	―	-9.36%	―	―	―
Sector *	57 Neutral	$20.31B	10.03	-14.49%	2.79%	5.15%	-23.76%
SSYS	47 Neutral	$651.79M	―	-14.34%	―	-8.79%	5.32%
DM	38 Underperform	$163.71M	―	-152.96%	―	-14.97%	22.83%

* Technology Sector Average

Performance Comparison

Desktop Metal

4.96

-6.24

-55.71%

SSYS

Stratasys

9.11

-1.53

-14.38%

MTLS

Materialise

4.40

-0.72

-14.06%

NNDM

Nano Dimension

1.41

-1.33

-48.54%

Desktop Metal Earnings Call Summary

Earnings Call Date: Mar 12, 2025 | % Change Since: 154.36% | Next Earnings Date: May 7, 2025

Earnings Call Sentiment Negative

The earnings call highlighted significant cost reduction efforts and some improvement in adjusted EBITDA. However, these were overshadowed by declining revenue, falling gross margins, elevated cash burn, and challenges in closing deals due to customer concerns about the company's financial position. The call emphasized a strategic merger with Nano Dimension as a necessary move given the challenging macroeconomic environment.

Highlights

Cost Reduction Achievements

Desktop Metal reduced non-GAAP operating expenses by 48% since Q1 2022 and executed approximately $150 million in annualized cost savings. Non-GAAP operating expenses for Q2 2024 were reduced by 22.2% year-over-year.

Adjusted EBITDA Improvement

Adjusted EBITDA for Q2 2024 improved year-over-year by $1.8 million compared to Q2 2023.

Lowlights

Decline in Revenue

Consolidated revenue for Q2 2024 was $38.9 million, a decline from $53.3 million in Q2 2023, driven by weaker hardware sales due to macroeconomic conditions.

Gross Margin Decline

Non-GAAP gross margins fell to 29.2% in Q2 2024 from 31% in the prior year, driven by weaker cost absorption on lower revenue.

Cash Burn Concerns

Q2 2024 ended with $46.7 million in cash, with outflows elevated by deal-related spend and cash burn of $20 million.

Challenges in Closing Deals

Customer hesitancy due to financial concerns led to difficulties in closing deals, impacting revenue.

Company Guidance

During Desktop Metal's Q2 2024 earnings call, key guidance focused on the company's strategic move to merge with Nano Dimension, following challenges in the macroeconomic environment and financial pressures. The company highlighted a 48% reduction in non-GAAP operating expenses since Q1 2022, with Q2 2024 revenue at $38.9 million, down from $53.3 million in Q2 2023, largely due to weaker hardware sales. Non-GAAP gross margins decreased to 29.2% from 31% year-over-year. Non-GAAP operating expenses were reduced by $7.7 million year-over-year to $27.0 million. The adjusted EBITDA improved by $1.8 million year-over-year, resulting in a negative $13.2 million. The company closed Q2 with $46.7 million in cash, noting elevated cash outflows related to deal-related expenditures. With the pending merger, the company has ceased providing guidance for the remainder of 2024.

Desktop Metal Corporate Events

M&A TransactionsRegulatory Filings and Compliance

Desktop Metal Announces Merger with Nano Dimension

Neutral

Nov 8, 2024

Desktop Metal, Inc. is set to merge with Nano Dimension Ltd., and stockholders need to submit specific documents to avoid a 25% Israeli withholding tax on merger proceeds. The merger is expected to be finalized in late 2024, subject to regulatory approvals. Stockholders should consult tax advisors to prepare the necessary documentation and ensure smooth transaction processing.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.