UPDATE: Credit Suisse Starts Desktop Metal Inc. (DM) at Neutral
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Credit Suisse analyst Matthew Cabral initiates coverage on Desktop Metal Inc. (NYSE: DM) with a Neutral rating and a price target of $14.00.
The analyst comments "Desktop Metal is an upstart in the high-growth additive manufacturing (and, more broadly, 3D printing) market, which we believe has significant potential ahead as digital innovation is poised to disrupt traditional manufacturing processes. Additive’s advantages vs. traditional include greater complexity in part design (critical for increasing strength or reducing weight) and higher levels of customization given a much flatter unit cost curve. That said, with a $3.5bn market cap vs. only $24mn of LTM sales, DM has a steep climb to grow into its existing valuation; even factoring in a robust ~250% CY20-22E CAGR (per Street estimates), DM still trades at ~15x CY22E sales vs. 3D printing/next-generation manufacturing peers at ~4x/~10x, respectively. We appreciate the TAM and opportunity created by unlocking the potential of additive manufacturing; however, DM’s trajectory is highly execution-dependent given its early stage; we see risks of lumpy revenue and/or profitability ahead and initiate with a Neutral rating and $14 TP."
Shares of Desktop Metal Inc. closed at $13.01 yesterday.
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