The ExOne Company Down to Strong Sell - Analyst Blog

Zacks Investment Research downgraded The ExOne Company XONE to a Zacks Rank #5 (Strong Sell) on Jun 21, 2014.

Why the Downgrade?

In the last 7 days, ExOne witnessed negative estimate revisions with estimates declining 4.9% for fiscal 2014 and 30% for fiscal 2015. Further, the company reported dismal first-quarter financial earnings.

Loss per share reflected a deterioration of almost 90% year over year and was also 171.4% wider than the Zacks Consensus Estimate. Prevailing sluggishness in the industry coupled with the negative impact from the longer sales cycle and the volatile nature of the machine business led to the disappointing performance of the company.

ExOne reported quarterly revenues of $7.3 million, reflecting a year-over-year decline of 8.2%. Revenues also fell significantly short of the Zacks Consensus Estimate of $10 million. The top line deterioration was primarily due to weakness in the company's 3D Printing Machines & Micro machinery business.

Margins were also impacted by additional costs related to the company's ExCast strategy. This apart, increased costs and lower volumes also hampered the company's financials.

The Zacks Consensus Estimate for the current quarter and the next quarter of fiscal 2014 remain unchanged at a loss of 15 cents and earnings 4 cents, respectively, in the last 30 days.

Not all companies in the sector are performing as poorly as ExOne. Some better-ranked companies in the industry that sport a Zacks Rank #1 (Strong Buy) include Logitech International LOGI, Mercury Systems Inc. MRCY and Synaptics Inc. SYNA.

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