On Wednesday, Goldman Sachs maintained a Buy rating on Xometry Inc (NASDAQ:XMTR) stock and increased its price target to $28.00 from $24.00, following the company's third-quarter earnings report.
Xometry, an on-demand manufacturing marketplace, reported total revenues that surpassed both Goldman Sachs and FactSet Street estimates and its own guidance, thanks to the robust performance of its Marketplace and continued growth in active buyers.
The company's gross profit margin also showed expansion, continuing the upward trend observed in recent quarters. Xometry's management expressed optimism about maintaining this momentum into the fourth quarter of 2024 and into the following year. Additionally, the company has revised its guidance to reach adjusted EBITDA breakeven sooner than initially planned, now aiming for this goal at a $600 million revenue run rate.
Further, Xometry anticipates achieving an incremental adjusted EBITDA margin of over 20% in the upcoming years. The company's success is partly attributed to the integration of artificial intelligence (AI) within its platform, which has enhanced both internal operations and the services offered to customers. This technological advancement is seen as a key factor in disrupting the broader manufacturing supply chain.
Goldman Sachs' updated 12-month price target reflects the positive developments reported in Xometry's earnings and the company's promising forward-looking statements. The firm's analysts have adjusted their operating estimates for Xometry to align with the latest earnings report and the management's updated outlook for the company's financial trajectory.
In other recent news, Xometry, an AI-powered marketplace for manufacturing services, has seen significant developments. The company reported robust financial performance for the second quarter of 2024, with a 19% year-over-year increase in revenue to $133 million. Marketplace revenue, a major contributor, marked a 25% surge to $117 million. This growth is mirrored in Xometry's active buyer base, which saw a 27% year-over-year increase.
In the same vein, Xometry has welcomed aerospace veteran Roy Azevedo to its Board of Directors. Azevedo's extensive experience in engineering, global manufacturing, and supply chain management, honed over 30 years at Raytheon (NYSE:RTN), is expected to be a valuable asset as the company expands its international reach.
However, despite these positive strides, Xometry reported a 13% decrease in supplier services revenue. The company remains optimistic, focusing on international expansion and enhancing auto-quoting capabilities with Google (NASDAQ:GOOGL) Vertex (NASDAQ:VRTX) AI. These recent developments underline Xometry's strategic efforts to harness industry expertise as it scales its operations globally.
InvestingPro Insights
Xometry's recent performance and Goldman Sachs' optimistic outlook are further supported by real-time data from InvestingPro. The company's revenue growth remains strong, with a 20.19% increase in the last twelve months as of Q2 2024, reaching $502.36 million. This aligns with the company's goal of reaching a $600 million revenue run rate for adjusted EBITDA breakeven.
InvestingPro Tips highlight that Xometry has seen significant returns recently, with a strong 48.59% return over the last month and an impressive 116.23% return over the last three months. These figures underscore the market's positive reaction to Xometry's performance and future prospects, as reflected in Goldman Sachs' raised price target.
However, it's important to note that Xometry is not yet profitable, with an operating income margin of -13.25% in the last twelve months. This aligns with the company's focus on reaching adjusted EBITDA breakeven in the near future.
For investors seeking a more comprehensive analysis, InvestingPro offers 14 additional tips for Xometry, providing a deeper understanding of the company's financial health and market position.
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