What happened
Shares of start-up company Xometry (XMTR +8.46%) took a more-than-17% dive today, as of 12:20 p.m. ET. The small but fast-growing online marketplace for on-demand manufacturing printed preliminary earnings for Q4 2021 that came in below some Wall Street analyst estimates (when excluding sales from recently acquired Thomas Publishing Company, which closed in December 2021).
So what
Specifically, Xometry said to expect total revenue within a range of $65.5 million to $67.5 million for Q4 2021. However, excluding sales from fellow product sourcing and supplier Thomas from the equation, Xometry's revenue last quarter should be within a range of $62 million to $63 million. It slightly beats management's own guidance provided a few months ago, but misses some bullish Wall Street estimates for sales to be as high as $64 million.
Image source: Getty Images.
It's probably unfair punishment for the stock, given how close Xometry was to stock-analysts' predictions, but it nonetheless underscores how much future growth is being baked into current share prices. Since going public last summer, Xometry has now lost about half its value from where it made its market debut.
Now what
Despite the temporary setback in stock price, Xometry remains a fast-growing business. Its marketplace for manufacturing procurement could help bring the industrial sector into the digital age and make sourcing of manufactured-goods production more efficient. It remains a promising bet on things like 3D printing and other manufacturing tech.
However, this stock isn't for every investor. Xometry is still losing money as it seeks rapid expansion of its platform. (Q4 revenue estimates imply expected growth of 63% to 66% year over year.)
As it gets bigger, the company will benefit from economies of scale, and net profit margins will eventually turn positive, but that could be a ways down the road (adjusted earnings before interest, taxes, depreciation, and amortization [EBITDA] was negative $10 million in Q3 2021). To that end, Xometry also announced a new $250 million convertible-debt offering concurrent with its preliminary earnings results to bolster its balance sheet.
Expect more volatility ahead for this stock, even though the business itself remains in high-growth mode.
