NNDM Stock Surges on Acquisition News

GuruFocus
2024-09-26

Nano Dimension (NNDM, Financial) stock experienced significant gains today, rising by 7.92%. The surge is largely attributable to the company's announcement to acquire Markforged, a specialist in industrial 3D printing, which follows a recent acquisition of Desktop Metal.

The acquisition of Markforged is structured as an all-cash deal, valuing Markforged at $5 per share, equating to a $115 million valuation. This represents a 71.8% premium over its previous valuation. In the last year, Markforged reported sales of $93.8 million and a 48.6% non-GAAP gross margin.

With the acquisitions of Markforged and Desktop Metal, Nano Dimension (NNDM, Financial) intends to reinforce its position in the additive manufacturing industry and work towards profitability. This strategic move has influenced investor sentiment, driving up the stock price.

The Markforged acquisition is expected to close in the first quarter of 2025, while the Desktop Metal buyout should finalize in the fourth quarter of this year. Collectively, these companies posted a revenue of $340 million last year. Management is optimistic that the integration of these businesses will ensure consistent profitability.

As of now, Nano Dimension has a market capitalization of approximately $522.88 million. Post-acquisition, the company predicts it will hold cash and equivalents of around $475 million.

From a valuation perspective, the stock's GF Value indicates it's a possible value trap, suggesting investors should think twice before diving in. For a detailed look at Nano Dimension's GF Value, you can visit the GF Value page.

Nano Dimension (NNDM, Financial) displays strong financial health with a robust Altman Z-Score of 6.84 and a Beneish M-Score of -3.08, indicating that the company is unlikely to be a manipulator. Moreover, the company shows strong financial strength, substantiated by its robust balance sheet and operational margin expansion.

On the downside, Nano Dimension has experienced a decline in revenue per share over the last five years and has a predictability score of -99. Despite these red flags, the company's current ratio of 29.64 and quick ratio of 28.93 reflect its strong liquidity position. Additionally, its price-to-book ratio of 0.6 and the close proximity of its stock price to a three-year low may present an attractive opportunity for value investors.

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