On Friday, Needham, a notable investment firm, revised its price target for Shapeways Holdings Inc. (NASDAQ: SHPW), a 3D printing company, to $3.00 from the previous $4.00, while maintaining a Buy rating on the stock. The adjustment follows the company's recent efforts to address its operational scale and cost structure.
The firm's analyst highlighted that Shapeways has entered 2024 with substantial reductions in its cost structure. At the same time, the company is actively consulting with strategic advisors to enhance shareholder value. This could potentially lead to the sale of either its manufacturing or software business segments.
Shapeways' financial performance in the fourth quarter of the previous year indicated some positive developments. The company reported a 9% year-over-year increase in revenue. Additionally, the adjusted EBITDA loss was smaller compared to the same period last year and slightly better than the firm's projections.
Despite these improvements, the analyst noted that Shapeways still faces a challenging road to reach a breakeven point, citing a need for a significant boost in top-line growth to achieve financial stability.
The company's financials reveal a monthly cash burn rate of $1.6 million, with a year-end position of $12 million in cash and marketable securities. Based on these figures, Shapeways is expected to persist in exploring various strategic options to secure its future.
InvestingPro Insights
Shapeways Holdings Inc. (NASDAQ: SHPW) has been making strategic moves to streamline operations, as reflected in the recent analysis by Needham. To provide additional context, InvestingPro data shows that Shapeways is trading at a low Price / Book multiple of 0.46, which might appeal to value investors seeking assets trading below their book value. The company's market capitalization stands at a modest $12.24 million, and despite a revenue growth of 3.93% in the last twelve months as of Q4 2023, challenges remain. This is evident from the significant price declines over various time frames, with a 6-month total return of -38.89%.
On the operational front, Shapeways is managing its liquidity prudently, as it holds more cash than debt on its balance sheet, which could provide some cushion against financial headwinds. However, the company's quick cash burn rate is a point of concern, echoing Needham's note on the urgency for top-line growth. InvestingPro Tips suggest that the company is not expected to be profitable this year, and analysts are not anticipating a turnaround in net income. With these factors in mind, investors might find value in the additional 14 InvestingPro Tips available for Shapeways, which can be accessed through InvestingPro. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing a deeper dive into the company's financial health and market potential.
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