FBR Capital Assumes The ExOne Company (XONE) at Outperform
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FBR Capital assumes coverage on The ExOne Company (NASDAQ: XONE) with a Outperform rating and a price target of $18.00.
New analyst Christopher Van Horn commented, "We believe that ExOne has a high-risk, high-reward profile in the additive manufacturing space. There is an opportunity for outsized returns, but there is also risk associated with the company's highly specialized business model. We think that there are three key support pillars for our thesis: (1) ExOne targets a niche technology—binder-jetting—that, we believe, is in the very early stages of adoption; the company's ability to scale is not an intrinsic issue, in our view. (2) The contribution margin appears fairly high—we expect volumes to steadily grow over the medium term as the company wins business in new end markets or with new customers, which should cure the financials more quickly than the market expects. (3) We believe that the market may perceive a capital risk, but we disagree: The free cash burn rate has been reduced substantially over the last two years, and current liquidity probably sets the company on solid ground for the next two years. That is beyond our forecast window and should be enough time for volume to pick up. Our $18 price target reflects a target multiple of 4x FY17E sales."
Shares of The ExOne Company closed at $15.22 yesterday.
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