Look who's back. Back again. $DM's back, tell a friend.
Yes, indeed it is that time again where I get to share what I feel is the play of the century – Desktop Metal (NYSE:DM). Following on from my previous installments *(including the hidden bonus track that the mods removed because of the lame ass $1B cap rule which we are now loitering around, which you can find here along with links to all of the others explaining the fundamentals and my thesis)* I felt it was time to again share an update.
Oh, God… not this again… WHAT NOW?!
Well, little monkey, read on and ye shall see… This week, the company reported its 2022Q2 results – of which the following is of quite significant importance.
– Firstly, the company reported record revenue of $57.7 million, up 204% from second quarter 2021, and an increase of 32% sequentially from first quarter 2022 along with increasing margins – demonstrating exponential growth is still very much on track.
– Second of all, the company announced during the quarter their “Strategic Integration and Cost Optimization Initiative” to increase the pace of “Additive Manufacturing 2.0” by reducing their liabilities, losses and ensure their path to profitability remains on track. This involves simplifying its operational structure, working the synergies between all of their subsidiaries to maximise efficiency, and continued investment in innovation of their technology – saving them $100M over 24 months.
– Finally, and most importantly, the company reaffirmed full year 2022 guidance of approximately $260 million for revenue, representing 131% growth from 2021, and approximately $(90) million for adjusted EBITDA – meaning reaching breakeven and profitability by late 2023 is very much on track.
The company continues to demonstrate growth and IP dominance in the AM sector through the further adoption of their various systems, and continue to expand their client base amongst various industry leaders, blue chips, and government. Their current client base features such names as Tesla,BMW**,** Toyota**, Ford, Medtronic, Adidas, Amazon,** Cartier**,** Bose, LG, Caterpillar,Siemens**, General Electric, Space X, Lockheed Martin, Raytheon,** Airbus, The United States Air Force, Army, Navy and DOD, Shapeways**,** amongst many, MANY others who continue to adopt and integrate Desktop Metal's machines into their design, prototyping and mass manufacturing.
Each of their flagship P-50 Production Systems generates a 10-year lifetime value of $4.3M, along with the flagship Xtreme 8K's $1.4M 7-year lifetime value – let alone all of their other products such as those in their rapidly expanding healthcare subsidiaries, of which there are already 1000+ printers installed and in regular service globally. Indeed, the company remains the industry leader in metal binder jetting, digital casting, printed hydraulics, while also being the only company with mass production solutions for printed foams and FDA-cleared solutions for restorative dentistry – demonstrating their dominance across the entire AM 2.0 spectrum.
WHAT ABOUT THE STONK?
After the annihilation of last earnings' report on the share price, sending the stock down to an unholy all-time low of $1.26 on a viciously red day (-67%), the trend has been solidly upwards back towards $3, where it is currently testing the 100DMA. (I tried to tell you you'd be missing out on at least 80% gains, blame the mods of r/wallstreetbets and r/stocks for taking the post down).
Weekly RSI remains low, and it has broken previous resistance at around $2.65, gaining close to 30% this week alone at the time of writing. I'm expecting a retest of the uptrend around $2.70 next week, and a break above the 100DMA to fill the gap and meet the 200DMA at around $3 in late September/early October. Beyond that, near term resistance at $3.40 and $4. I feel confident that in the next 12 months the stock will reach pre-merger levels of $9-10 in anticipation of breakeven in 2023Q4, and I retain my 10-year price targets. Once again, ripe for short term plays and long term plays. Currently bagholding 1,500 shares at $3.35 because my country is lame and doesn't let us play with LEAPs.
Leave a Reply