Assessing The ExOne Company’s (NASDAQ:XONE) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess XONE’s recent performance announced on 30 June 2018 and evaluate these figures to its longer term trend and industry movements.
Was XONE’s recent earnings decline indicative of a tough track record?XONE is loss-making, with the most recent trailing twelve-month earnings of -US$21.24m (from 30 June 2018), which compared to last year has become more negative. Furthermore, the company’s loss seem to be growing over time, with the five-year earnings average of -US$16.98m. Each year, for the past five years XONE has seen an annual increase in operating expense growth, outpacing revenue growth of 12.21%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Eyeballing growth from a sector-level, the US machinery industry has been growing its average earnings by double-digit 23.17% over the past twelve months, and a less exciting 5.31% over the last five years. This growth is a median of profitable companies of 25 Machinery companies in US including COSCO Shipping International (Singapore), IHI and Omni-Lite Industries Canada. This means whatever tailwind the industry is deriving benefit from, ExOne has not been able to gain as much as its industry peers.
Given that ExOne is currently unprofitable, with operating expenses (opex) growing year-on-year at 7.23%, it may need to raise more cash over the next year. It currently has US$11.58m in cash and short-term investments, however, opex (SG&A and one-year R&D) reached US$35.19m in the latest twelve months. Even though this is analysis is fairly basic, and ExOne still can cut its overhead in the near future, or raise debt capital instead of coming to equity markets, the analysis still helps us understand how sustainable the ExOne’s operation is, and when things may have to change.
What does this mean?
Though ExOne’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always hard to predict what will occur going forward, and when. The most valuable step is to examine company-specific issues ExOne may be facing and whether management guidance has dependably been met in the past. I suggest you continue to research ExOne to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for XONE’s future growth? Take a look at our free research report of analyst consensus for XONE’s outlook.
- Financial Health: Are XONE’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 June 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.