Analysts often do not spare praise. But in difficult economic situations such as this, positive predictions do not come around that often. Not so in the case of this futuristic company.

Founded in 2012 and based in Burlington, Massachusetts, USA, DM Desktop Metal $DM is a developer and manufacturer of metal 3D printers. Its metal 3D printing technology allows customers to print metal parts on-site without the need for additional modifications.

DM Desktop Metal currently employs over 200 people and has received over $680 million in funding from investors. Investors include Saudi Aramco, BMW, Lowe's and Stratasys. The company has more than 400 customers worldwide in a variety of industries such as manufacturing, automotive, education and healthcare.

Metal 3D printing allows for more flexible and efficient production of metal parts without the necessary costs and time delays associated with making molds and tooling for traditional manufacturing processes. DM Desktop Metal's powder bed based technology can quickly and inexpensively create complex metal parts on the job site. This technology has the potential to fundamentally change the way metal parts are designed and manufactured, opening up new opportunities for innovation in manufacturing.

With the increasing use of 3D printing technology, DM Desktop Metal can expect to continue to grow its sales and profits. The company has the potential to become one of the leaders in the field of industrial 3D printing of metal parts.

Sector and competition

The industrial 3D printing sector, which includes DM Desktop Metal, is a very promising field that has been growing rapidly in recent years. There are several key trends that we will look at.

There is a growing demand for short production runs and greater product personalisation. 3D printing enables flexible and efficient production of even small batches and unique pieces. The digitalization of manufacturing processes and the expansion of the Industry 4.0 concept. 3D printing is a fully digitalized production process that is easily integrated into digital manufacturing systems.

There is also a shortage of skilled labour in traditional manufacturing. 3D printing is less demanding on human resources.

DM Desktop Metal's biggest competitors include companies such as:

3D Systems - one of the pioneers of 3D printing, offering a wide portfolio of 3D printers and materials including metals. In 2019, it had sales of over $630 million. USD.

Stratasys - a leading global provider of 3D printing solutions, also has metal 3D printers following the acquisition of Origin. Revenues in 2019 were over $660 million. USD.

https://www.youtube.com/watch?v=zi7ZvhiVqNw

Markforged - a startup that developed an affordable metal 3D printer and went public in 2021. Expected revenue for 2023 is around USD 120 million.

GE Additive - a division within GE focused on 3D printing industrial parts from metallic materials, particularly titanium alloys. GE Additive's 2021 operating revenues exceed $220 million. USD 220 BILLION.

Overall, it is a fragmented market with both large companies and smaller startups. The key to success will be to offer advanced and affordable solutions to industrial customers. DM Desktop Metal is well positioned for growth in this market due to its unique technology and strong funding.

Current thesis

If one thing is certain after recent results, it is that Desktop Metal is much more than a small company. In fact, DM believes it can be part of addressable markets totaling in excess of $790 billion. This includes a core business focused on mass production through Binder Jetting and Photopolymers, as well as growth opportunities in foams, sheet metal forming and printed hydraulics.

Estimates for 2023 have been set conservatively at $210-260 million in revenue and $50 million in EBITDA. They also assume a weak Q1 FY23 based on historical seasonal trends.

Jason Cole, Desktop Metal's CFO, even helped the analytical model by providing EBITDA break-even figures for the rest of the year. He said that breakeven could be possible if they can achieve $60 million in revenue per quarter in 2023.

Desktop Metal, Inc's valuation has risen to 2.7x forward earnings. When compared to peers with longer operating histories, such as Stratasys and 3D Systems, DM stock trades at a premium but has lower EBITDA margins, despite higher expected growth. The latter is important and also exactly why investors and analysts are positive on the expected price. They think DM will achieve a break-even in 4Q23. And that makes investors spare no expense in positive assessments. Some think the stock could rise to a tenfold multiple. What do you think? Is that realistic?

Disclaimer: This is by no means an investment recommendation. This is purely my summary and analysis based on data from the internet and other sources. Investing in the financial markets is risky and everyone should invest based on their own decisions. I am just an amateur sharing my opinions.