Xometry’s Strong Performance and Growth Trajectory Affirm Buy Rating

Analyst Eric Sheridan from Goldman Sachs reiterated a Buy rating on Xometry (XMTR – Research Report) and decreased the price target to $26.00 from $28.00.

Eric Sheridan has given his Buy rating due to a combination of factors indicating Xometry’s solid performance and promising growth trajectory. Xometry’s recent quarterly earnings surpassed previous revenue projections, demonstrating a stronger recovery in its marketplace segment than anticipated. While EBITDA was only in line with expectations, even with the revenue outperformance, the company is expected to sustain losses in the short term as it strategically invests in key areas. These investments, focusing on Enterprise solutions and expanding international market presence, are designed to bolster long-term growth. Sheridan also notes that despite some volatility in the macroeconomic climate, management maintains a confident outlook on achieving improved growth and operating leverage in the second half of 2024, with a path to profitability expected to materialize within the year.

Sheridan’s optimism extends beyond the immediate future, recognizing Xometry’s potential to leverage numerous growth drivers. These include a robust, AI-powered instant quote engine—enhanced through a partnership with Google’s Vertex AI—to commence yielding benefits in the current year. Additionally, Sheridan identifies opportunities for Xometry to increase its scale and market penetration internationally, upsell its Enterprise offerings, and expand advertising and supplier services. These initiatives are set against a backdrop of a large total addressable market exceeding $2 trillion, which remains largely untapped. Despite a slight reduction in the 12-month price target from $28 to $26, the Buy rating reaffirms Sheridan’s confidence in Xometry’s strategic positioning and long-term prospects.

In another report released yesterday, JMP Securities also maintained a Buy rating on the stock with a $27.00 price target.

Based on the recent corporate insider activity of 40 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of XMTR in relation to earlier this year.

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Xometry (XMTR) Company Description:

Xometry Inc is engaged in providing AI-enabled manufacturing equipment. Its buyers include engineers, product designers, procurement and supply chain personnel, inventors, and business owners. The manufacturing processes offered by the company include CNC Machining, Injection Molding, Urethane Casting, 3D Printing, and Die Casting.