On Wednesday, Craig-Hallum adjusted its outlook on Xometry Inc (NASDAQ:XMTR) shares, increasing the price target to $30.00, up from the previous $20.00, while reaffirming a Buy rating on the company's shares. The revision follows Xometry's announcement of strong quarterly results, which were marked by a significant 24% year-over-year growth in its marketplace, despite a generally soft manufacturing sector.
The company's approach to EBITDA profitability in the quarter was noted, with guidance indicating the expectation of profitability in the fourth quarter. This development is seen as a key achievement for Xometry. The firm's analyst highlighted that the combination of robust growth and the new prospect of profitability could draw a different type of investor to Xometry's stock.
The analyst also pointed out that with positive cash flow anticipated within the next few quarters, Xometry could see a decrease in short interest, potentially serving as an additional positive factor for the stock's performance. The optimistic outlook is based on the expectation that if Xometry continues to execute its strategy effectively, the stock could see further upside.
The report concluded by emphasizing the firm's recommendation for investors to consider Xometry shares, supported by the raised price target and the company's promising financial trajectory.
In other recent news, Xometry, an AI-powered marketplace for manufacturing services, has reported significant developments. The company's third-quarter earnings report revealed total revenues surpassing both Goldman Sachs (NYSE:GS) and FactSet Street estimates, thanks to a robust performance of its Marketplace and continued growth in active buyers.
Goldman Sachs maintained a Buy rating on Xometry and increased its price target to $28.00 from $24.00, reflecting the company's promising financial trajectory. Moreover, Xometry's management revised its guidance to reach adjusted EBITDA breakeven sooner than initially planned, now targeting this goal at a $600 million revenue run rate.
Moreover, Xometry announced the appointment of aerospace veteran Roy Azevedo to its Board of Directors, a strategic move as the company expands its global reach. The company also reported a 19% year-over-year increase in revenue to $133 million in the second quarter of 2024, with Marketplace revenue marking a 25% surge to $117 million.
Despite a 13% decrease in supplier services revenue, Xometry remains optimistic, focusing on enhancing auto-quoting capabilities with Google (NASDAQ:GOOGL) Vertex (NASDAQ:VRTX) AI. These recent developments underline Xometry's strategic efforts to harness industry expertise as it scales its operations globally.
InvestingPro Insights
Xometry's recent performance aligns with several InvestingPro Tips and metrics, providing additional context to Craig-Hallum's optimistic outlook. The company has shown a significant return over the last week, with InvestingPro data indicating a 31.77% price total return. This recent surge is part of a broader trend, as Xometry has demonstrated strong returns over the last month (48.59%) and three months (116.23%), supporting the analyst's positive view on the stock's potential.
InvestingPro Tips highlight that three analysts have revised their earnings upwards for the upcoming period, which corroborates Craig-Hallum's bullish stance. Additionally, the tip noting that Xometry operates with a moderate level of debt aligns with the analyst's expectation of positive cash flow in the coming quarters.
However, investors should note that Xometry is not currently profitable, with a negative operating income of -$55.86 million in the last twelve months. This underscores the importance of the company's guidance towards EBITDA profitability in the fourth quarter, as mentioned in the article.
For a more comprehensive analysis, InvestingPro offers 11 additional tips for Xometry, providing investors with a deeper understanding of the company's financial position and market performance.
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