Markforged surpasses expectations in its financials while Velo3D falls short.

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Two 3D printing original equipment manufacturers (OEMs), Markforged and Velo3D, recently released their Q2 earnings reports, revealing interesting similarities despite their differences in meeting expectations.

Markforged reported revenue of $25.4 million, slightly beating Velo3D’s revenue of $25.13 million. Additionally, Markforged reported a loss of 7 cents per share, while Velo3D’s loss was 10 cents per share. Both companies showed improvements in revenue compared to the previous year, with Markforged’s revenue up by 5 percent and Velo3D’s up by 28 percent.

The major difference between the two reports lies in their guidance for the rest of 2023. Markforged maintained its revenue expectations between $101 and $110 million, while Velo3D lowered its revenue projections from $120 to $130 million to $105 to $115 million. Despite this, it is striking that both companies now have similar year-end expectations.

In Markforged’s earnings call, CEO Shai Terem emphasized the company’s commitment to profitability and capital management. He mentioned a focus on operating expenses, which were down 11 percent year-over-year on a non-GAAP basis. Terem also mentioned the company’s goal of finding additional working capital efficiencies.

Velo3D’s CEO, Benny Buller, highlighted operational improvements in manufacturing cycle times for their Sapphire XC and Sapphire XC 1MZ systems. He mentioned the benefits of scale in production processes, improvements in materials cost and manufacturing efficiency, and the company’s dedication to reducing operating costs in the second half of the year.

Both companies have seen significant rebounds in their share prices from their 52-week lows, although Markforged experienced a lower bottom. Both stocks are currently trading in the $1.40 to $2.00 range. It is likely that their moving averages will not change much for the remainder of the year, but their prices may fluctuate within a wide range.

Looking beyond beats and misses, it is important to consider the potential for organic growth in the additive manufacturing (AM) sector when evaluating these OEMs. Both Markforged and Velo3D are focused on the right verticals within the AM sector. The individual investor’s assessment of AM’s growth potential over the next few years should determine whether or not these companies are compelling at their current valuations.

Markforged has potential in the aerospace sector, especially if the metal binder jetting (MBJ) market continues to gain traction. The company’s CEO also mentioned the success of their distributed manufacturing offering, the Digital Forge, in a strategic transaction with a global automotive leader.

Velo3D has opportunities for growth in the aerospace, automotive, and defense sectors. Additionally, the company excels in oilfield services. With these strengths and the overall potential for AM’s growth, investors should consider the long-term prospects of these OEMs.

In conclusion, despite differences in meeting expectations, Markforged and Velo3D performed similarly in Q2. Both companies show potential for growth in the AM sector, and evaluating their valuations should consider the investor’s assessment of AM’s growth prospects.

The Future of 3D Printing: A Potential Merger Between Markforged and Velo3D

In a surprising turn of events, 3D printing companies Markforged and Velo3D have found themselves in a unique position. With both companies experiencing a decline in share prices, they are now within close distance of each other in terms of market capitalization. This intriguing situation has sparked conversations about a potential merger between the two companies, and the possibilities that could arise from such a partnership.

Velo3D recently made headlines with the announcement of a sale of their Sapphire XC platform to Schoeller-Bleckmann Oilfield Technology, an Austrian manufacturer in the oilfield exploration industry. This sale signifies a potential shift in the exploration and production companies’ willingness to reinvest, following the stabilization of fossil fuel prices. This could be a promising sign for Velo3D and its future prospects.

Further adding to Velo3D’s financial landscape, the company also revealed its plans to issue $70 million in senior convertible notes to existing institutional investors. This move could potentially impact the company’s bottom line, as the conversion of these notes into common stock would influence the share price. Regardless of the outcome, Velo3D’s financial position could undergo significant changes.

Meanwhile, Markforged, another player in the 3D printing market, has also experienced a decline in its share price. Though both companies find themselves in a similar situation, their unique offerings and target markets suggest potential synergies that could arise from a merger.

A combination of Markforged and Velo3D would create a powerful force in the additive manufacturing (AM) industry. Markforged’s expertise in carbon fiber and Metal Boundaries Joining (MBJ) markets would complement Velo3D’s strengths, while Velo3D’s focus on small and medium enterprises (SMEs) would give Markforged an advantage in targeting this crucial segment. The merger would not only benefit the companies involved but could also prove advantageous for renowned investor Cathie Wood, who has a vested interest in the 3D printing industry.

Moreover, a combined company would position itself at the forefront of AM-driven distributed manufacturing. With the guidance provided by both Markforged and Velo3D, a merger could result in a projected revenue of $200 million by 2023. This promising forecast further solidifies the potential for a successful collaboration between the two companies.

Although it is important to note that this article does not constitute investment advice, the possibilities that arise from a Markforged and Velo3D merger are worth considering. The 3D printing industry continues to evolve at a rapid pace, and strategic partnerships such as these have the potential to shape its future.

Stay tuned for more updates from the 3D printing industry as we explore the latest developments and opportunities. Sign up to receive information and offers from third-party vendors to stay informed and take advantage of upcoming advancements in this exciting field.

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