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Proto Labs Inc (PRLB)
NYSE:PRLB
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Proto Labs
(NYSE:PRLB)
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Rating:72Outperform
Price Target:
$75.00
▲(11.08% Upside)
The score is driven primarily by strong financial resilience (near-zero leverage and solid cash generation). Technicals support the uptrend, but an overbought RSI increases near-term risk. Valuation is the largest constraint due to the very high P/E and no dividend support, while earnings-call guidance and commentary are constructive but tempered by Europe weakness, margin pressure in the network business, and ongoing transformation costs.
Positive Factors
Balance Sheet Strength
Proto Labs' near-zero leverage provides durable financial flexibility and low solvency risk, enabling sustained investment in factories, certifications, and buybacks without refinancing pressure. This balance-sheet strength supports multi-quarter strategic initiatives and resilience through downturns.
Cash Generation
Consistent operating and free cash flow underpins the company's ability to fund capital expenditures, transformation programs, and shareholder returns. Solid cash conversion through multiple years improves capital allocation optionality and supports durable investment in automation and production scale-ups.
Medical Production Capability
ISO 13485 certification is a structural enabler to enter regulated medical device production, opening higher-margin, volume production opportunities. This certification and pilots with medical customers create a lasting growth runway and diversification away from cyclical prototyping demand.
Negative Factors
Regional Weakness - Europe
Sustained European revenue declines signal structural go-to-market or demand issues in a major geography. Regional underperformance forces resource reallocation, margin reset, and can constrain consolidated growth rates for multiple quarters while management retools the sales and cost model.
Network Margin Pressure
Material deterioration in network margins from tariffs and fulfillment inefficiencies reduces durable profitability and limits operating leverage. Persistent network inefficiencies require structural fixes in logistics/contracts and can depress corporate margins until resolved over several quarters.
Modest Growth & Margin Momentum
Though profitability recovered from 2022, revenue growth is only modest and operating margins haven't regained earlier peaks. This implies limited near-term leverage and a multi-quarter path required to translate growth into sustainably higher ROE and shareholder returns.
Proto Labs (PRLB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.56B
Dividend YieldN/A
Average Volume (3M)197.66K
Price to Earnings (P/E)74.7
Beta (1Y)1.17
Revenue Growth2.82%
EPS Growth-34.29%
CountryUS
Employees2,357
SectorIndustrials
Sector Strength72
IndustryManufacturing - Metal Fabrication
Share Statistics
EPS (TTM)0.44
Shares Outstanding23,678,745
10 Day Avg. Volume295,294
30 Day Avg. Volume197,656
Financial Highlights & Ratios
PEG Ratio1.63
Price to Book (P/B)1.80
Price to Sales (P/S)2.27
P/FCF Ratio20.29
Enterprise Value/Market Cap0.93
Enterprise Value/Revenue2.70
Enterprise Value/Gross Profit6.08
Enterprise Value/Ebitda22.22
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)1.68
Revenue Forecast (FY)$552.97M
Proto Labs Business Overview & Revenue Model
Company DescriptionProto Labs, Inc., together with its subsidiaries, operates as an e-commerce driven digital manufacturer of custom prototypes and on-demand production parts in the worldwide. The company offers injection molding; computer numerical control machining; three-dimensional (3D) printing, which include stereolithography, selective laser sintering, direct metal laser sintering, multi jet fusion, polyjet, and carbon DLS processes; and sheet metal fabrication products, including quick-turn and e-commerce-enabled custom sheet metal parts. It serves developers and engineers, who use 3D computer-aided design software to design products across a range of end markets. The company was incorporated in 1999 and is headquartered in Maple Plain, Minnesota.
How the Company Makes MoneyProto Labs generates revenue primarily through its services in rapid prototyping and low-volume production. The company's revenue model is based on charging customers for the manufacturing of custom parts, which includes fees for design, engineering, and production. Key revenue streams include CNC machining, 3D printing, injection molding, and sheet metal fabrication. Proto Labs also benefits from repeat business with its customers, who often return for additional prototypes or production runs as their projects evolve. The company's efficiency in production and quick turnaround times are significant factors that attract clients, leading to a steady stream of orders. Additionally, partnerships with technology providers and ongoing investments in automation and manufacturing technologies further enhance its operational capabilities and revenue potential.
Proto Labs Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where Proto Labs is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where Proto Labs is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyProto Labs Earnings Call Summary
Earnings Call Date:Feb 06, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 01, 2026
Earnings Call Sentiment Positive
The earnings call conveyed a broadly positive outlook driven by record quarterly and annual revenue, strong CNC and factory margin performance, improved revenue per customer, solid cash generation, and concrete strategic moves (ISO 13485, India GCC, product and e‑commerce initiatives). However, the company faces notable near-term challenges — a material decline in Europe, pressure on network margins (tariffs/inefficiencies), declines in injection molding and 3D printing prototyping demand, and short-term operating and transformation costs. Management framed 2026 as a year of transformation intended to drive sustained, higher growth and margin expansion, and provided modest 6–8% revenue guidance while investing to scale long-term initiatives.Q4-2025 Updates
Positive Updates
Record Quarterly and Annual Revenue
Fourth quarter revenue was a company record of $136.5M, up 11% year over year in constant currencies; full year 2025 revenue was $533.1M, up 5.7% year over year in constant currencies.
Improved Revenue per Customer / Contact
Revenues per customer grew 13% in 2025, and management noted revenue per contact accelerated ~23% in Q4, demonstrating success in increasing share of wallet from existing customers.
Strong CNC and Sheet Metal Demand
CNC machining saw robust growth: overall CNC revenue grew 16.7% year over year and U.S. CNC revenue grew 25% in 2025 (U.S. CNC +35% in Q4). Sheet metal revenue grew 12% year over year. Management cited strong demand from drones, satellites, rockets, robotics and other aerospace/defense end markets.
High and Improving Factory Margins
Fourth quarter non-GAAP gross margin was 44.8%, up 140 basis points year over year. Full year factory non-GAAP gross margin was 49%, up 70 basis points year over year, driven by volume growth and factory productivity improvements.
Network and Factory Revenue Mix Strength
Proto Labs network revenue grew 13.8% for the year while factory revenue also grew; fourth quarter revenue fulfilled to network was $30.5M, up 11.2% in constant currencies, showing balance between factory and network channels.
Cash Generation and Balance Sheet Strength
Generated $74.5M in cash from operations in 2025, returned $43M to shareholders via repurchases, and ended the year with $142.4M in cash and investments and zero debt.
Certifications and Production Capability Expansion
Achieved ISO 13485 certification for U.S. factory injection molding (medical device production requirement) and initiated pilots with two medical device customers for high-precision production volumes — a key enabler for expanding production revenue.
2026 Growth Guidance and Strategic Plan
Management expects 2026 GAAP revenue growth of 6–8% and provided Q1 revenue guidance of $130M–$138M (midpoint implies ~6% growth). Company outlined four strategic pillars (customer experience, innovation, production expansion, operational efficiency) and reiterated a long-term path toward $1B revenue and margin expansion.
Negative Updates
Decline in Europe Revenue
Europe revenue declined 8.1% in Q4 (constant currencies) and 7% for the full year, prompting a regional reset with go-to-market changes and cost structure realignment to address underperformance.
Weakness in Injection Molding and 3D Printing
Injection molding revenue declined 1.9% for the year (hit by weakness in medical device and lower prototyping demand). 3D printing revenue declined 4.7% year over year due to weak prototype demand for plastic parts and older technologies (though metal 3D printing DMLS saw double-digit growth in the U.S.).
Network Gross Margin Pressure
Network non-GAAP gross margin fell ~190 basis points year over year to ~31% (Q4 network margin 30.3%), attributed largely to inefficiencies related to tariffs and network fulfillment complexities.
Rising Operating Expenses and Short-Term Charges
Q4 non-GAAP operating expenses increased $5.2M year over year (driven by higher incentive compensation, commissions, and medical expenses). Full year non-GAAP operating expenses were $193.3M (36.3% of revenue vs. 36.0% prior year). Management also expects transformation and restructuring costs (noted ~$0.7M add-back) as part of 2026 changes.
Softness/Normalizing Demand Early in 2026
Management noted a typical post-holiday normalization in January and implied Q1 may be softer sequentially despite Q4 strength; the guidance cadence reflects a year of transformation rather than immediate step-change acceleration.
Decline in Unique Buyers / Contacts
Investor questions noted unique developers/contacts were down to the lowest level in a while; management emphasized focus on revenue per contact but acknowledged the need to grow both contacts and revenue per contact over time.
Company Guidance
Proto Labs guided full-year 2026 GAAP revenue growth of 6–8% and gave Q1 2026 revenue guidance of $130–$138 million (midpoint implying roughly 6% year‑over‑year growth), with a ~$2.1 million favorable foreign‑currency impact versus 2025; they expect Q1 non‑GAAP EPS of $0.36–$0.44 and disclosed full‑year non‑GAAP assumptions including stock‑based compensation ≈ $3.6M, amortization ≈ $0.9M, transformation and restructuring costs ≈ $0.7M, and a non‑GAAP effective tax rate of 24–25%.Proto Labs Financial Statement Overview
Summary
Strong overall fundamentals led by an exceptionally low-debt balance sheet and solid operating/free cash flow. Profitability has recovered since 2022, but revenue growth is modest and margins remain below 2020–2021 levels, limiting the score.Income Statement
PRLB’s profitability has recovered meaningfully from the 2022 loss year, with positive earnings in 2023–2024 and further improvement in TTM (Trailing-Twelve-Months) net margin (~4.0%) versus 2024 (~3.3%). Gross margin has remained fairly steady around the mid-40% range, supporting a solid baseline profitability profile. The key weakness is growth and margin momentum: revenue is only modestly higher in TTM (Trailing-Twelve-Months) (roughly +2.8%) after a flat 2024, and operating/EBITDA margins are still well below 2020–2021 levels—suggesting the business has not fully regained prior operating leverage.68
Positive
Balance Sheet
The balance sheet is a major strength. Debt is extremely low (TTM (Trailing-Twelve-Months) debt-to-equity ~0.004), indicating minimal leverage risk and strong financial flexibility. Equity and assets are substantial and stable, and return on equity has moved back into positive territory in TTM (Trailing-Twelve-Months) (~3.1%) after the 2022 downturn. The primary drawback is that returns remain modest versus earlier stronger periods (e.g., 2020–2021), implying profitability is not yet fully translating into higher shareholder returns.90
Very Positive
Cash Flow
Cash generation is solid, with TTM (Trailing-Twelve-Months) operating cash flow of ~$74.5M and free cash flow of ~$65.0M, and cash flow broadly tracking earnings (free cash flow to net income ~1.0x in TTM (Trailing-Twelve-Months)). However, free cash flow declined in TTM (Trailing-Twelve-Months) (about -11%), and cash conversion has been uneven across years (notably weaker in 2021 and stronger in 2024). Overall, cash flow is supportive, but the recent free-cash-flow step-down warrants monitoring.74
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 533.13M | 500.89M | 503.88M | 488.40M | 488.10M |
| Gross Profit | 237.14M | 223.20M | 221.99M | 215.47M | 222.69M |
| EBITDA | 64.88M | 60.68M | 66.58M | -58.45M | 80.67M |
| Net Income | 21.24M | 16.59M | 17.22M | -103.46M | 33.37M |
Balance Sheet | |||||
| Total Assets | 760.36M | 743.51M | 772.35M | 802.17M | 928.58M |
| Cash, Cash Equivalents and Short-Term Investments | 128.12M | 103.09M | 102.80M | 80.13M | 77.51M |
| Total Debt | 4.65M | 3.52M | 5.48M | 21.35M | 7.44M |
| Total Liabilities | 89.48M | 73.36M | 77.06M | 104.52M | 100.09M |
| Stockholders Equity | 670.87M | 670.15M | 695.29M | 697.65M | 828.49M |
Cash Flow | |||||
| Free Cash Flow | 59.66M | 68.66M | 45.16M | 40.39M | 21.03M |
| Operating Cash Flow | 74.50M | 77.83M | 73.27M | 62.08M | 55.24M |
| Investing Cash Flow | -13.41M | -13.58M | -4.55M | -43.09M | -94.66M |
| Financing Cash Flow | -40.37M | -58.55M | -41.86M | -27.92M | -22.20M |
Proto Labs Technical Analysis
Positive
67.52
Price Trends
55.50
Positive
53.10
Positive
48.07
Positive
Market Momentum
3.64
Negative
67.31
Neutral
79.97
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRLB, the sentiment is Positive. The current price of 67.52 is above the 20-day moving average (MA) of 59.19, above the 50-day MA of 55.50, and above the 200-day MA of 48.07, indicating a bullish trend. The MACD of 3.64 indicates Negative momentum. The RSI at 67.31 is Neutral, neither overbought nor oversold. The STOCH value of 79.97 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PRLB.
Proto Labs Risk Analysis
Proto Labs disclosed 35 risk factors in its most recent earnings report. Proto Labs 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
Proto Labs Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $698.53M | 20.02 | 9.78% | ― | 7.61% | 25.35% | |
72 Outperform | $1.56B | 74.67 | 3.17% | ― | 2.82% | -34.29% | |
68 Neutral | $718.83M | 15.25 | 13.77% | 3.49% | 22.39% | 112.75% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $429.53M | 37.56 | 5.06% | ― | -12.38% | -0.71% | |
54 Neutral | $304.07M | 26.55 | 1.26% | ― | -3.42% | ― | |
52 Neutral | $1.22B | -33.57 | -2.81% | 2.84% | -4.89% | -214.50% |
* Industrials Sector Average
PRLB
Proto Labs
65.52
24.96
61.54%
IIIN
Insteel Industries
37.37
9.23
32.79%
NWPX
Northwest Pipe Company
73.64
25.83
54.03%
TG
Tredegar
8.75
0.64
7.89%
RYI
Ryerson Holdings
23.90
0.38
1.60%
MEC
Mayville Engineering Company
21.58
6.51
43.20%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.