CAPScall of the Week: ExOne Co (XONE)

The call
After carefully reviewing the prospects for ExOne, I’ve decided to place a CAPScall of underperform on the company.

As Steve Heller pointed out in his analysis, this one appears to be a pretty cut-and-dried case of overvaluation. ExOne sold only four 3-D printing machines in 2010, four in 2011, and just five through the first nine months of 2012. That’s 13 machines in 11 quarters, ranging from $800,000 to $1.4 million. Clearly, its customers rely on ExOne for its printing services more so than its machines, which seem to take quite a long time to build and sell.

From a financial perspective, ExOne is valued at 16 times trailing sales, it probably won’t be producing a profit any time soon, and it boasts a negative book value. Unless the global economy was to make an abrupt about-face, there’s very little value in ExOne until it can demonstrate its ability to be profitable. With 3D Systems and Stratasys at least being profitable, I can, without a doubt, anoint ExOne the worst company in the sector.

The article CAPScall of the Week: ExOne originally appeared on and is written by Sean Williams.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong. The Motley Fool recommends and owns shares of 3D Systems, Ford, and Stratasys and has options on 3D Systems.

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