ExOne IPO Analysis

ExOne

Industrial 3d printer maker ExOne will IPO in the coming months and list as XONE on the Nasdaq market.  They hope to make about $75 million through the IPO.  The prospectus they recently released to potential investors contains gems on ExOne and the 3d printing market in general.

ExOne sold just five of their industrial 3d printers in the last months of 2012 and shipped less than ten machines. Sales of printers and other products were mostly to companies in the automotive, heavy equipment, and aerospace industry, and around 60% to companies outside the United States.  The ExOne S-Max is currently one of the 3d printers with the largest print bed available, and ExOne specializes in metals, glass, and ceramics.

ExOne believes the 3d printing market will grow at a larger rate than the 18% the 2012 Wholers report suggests.  They claim as the price decreases, more manufacturers currently using subtractive and mold manufacturing will move to additive 3d printing manufacturing.  Their revenue recently has been increasing by 15-20% each year.

They are currently losing taking in about $20 million a year but losing about $12 million because of costs and a large stock bonus of $7 million management gave themselves just before the IPO.  They’ve been funded largely by investment from their CEO, and it seems clear the IPO is intended to raise the money they need to continue working out their growth plans.

As a company losing money with revenue coming from very few sales, it’s hard to tell how the market will value ExOne.  A buyout before the IPO similar to Stratasys and 3d Systems seems unlikely. The desired price would be a price / sales of 12, while Stratasys and 3d Systems have p/s values of 9 and 10.  But companies like Organovo are at 170, so will the market decide it believes in the growth potential of ExOne?  A few months will decide the future of ExOne.

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January 30, 2013
Categories: Investing, News