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Small-Cap Confidential
Undiscovered stocks that can make you rich

May 11, 2022

Xometry (XMTR) delivered quarterly results ahead of expectations this morning.

Xometry (XMTR) Reports
Xometry (XMTR) delivered quarterly results ahead of expectations this morning. Revenue of $83.7 million (+91%) beat by $2 million while adjusted EPS of -$0.27 beat by $0.09. Active buyers up 44% to 30,683. Marketplace accounts with spend over $50K over last twelve months up 92% to 790. Cash at end of quarter $369 million. Obviously, the growth is fantastic. In terms of growth initiatives, the “Xometry Everywhere” project (integrating instant quoting into third-party websites) is ongoing, Medical Device Manufacturing certification was obtained, operations are expanding in Europe and now China as well, and the Thomas integration is progressing nicely. Full-year revenue growth is expected to be 80% to 83% ($392 - $400 million) with improving gross margins.

Pretty much everything sounds good, and XMTR has been relatively stable so far today (something that can be said about few software stocks after reporting these days). The main issue, still, is that momentum is to the downside and investors are taking a glass-half-empty view of this market. Disruptive manufacturing supply companies (i.e., Xometry) aren’t high on the list of places to start buying. Analysts are sure to slash price targets today for XMTR (many were near 75, no way that sticks). On the upside, sentiment can’t get that much worse (probing multi-decade lows), and software valuations are now below the trailing five-year average (more on that in tomorrow’s Weekly Update). As these types of stocks have continued their relentless declines, a bottom is necessarily closer than it was last week (and the week before, and the week before …). But not calling it just yet. Holding our noses and keeping XMTR for now. HOLD