Headquartered in Israel, Nano Dimension Ltd. (NNDM) is an additive electronics company well-known for its DragonFly lights-out digital manufacturing technology. The stock has lost 15.5% over the past month and 45.3% year-to-date to close its last trading session at $4.98.

The company suffered a severe setback amid the COVID-19 pandemic as several of its production units had to be closed. Furthermore, the demand for NNDM's products and services — such as its 3D printing technology for creating electrical devices — also saw a dramatic drop in demand, which led to the stock plummeting over the past couple of months.

Furthermore, with widespread usage of 3D printing technology in the automobile industry to produce prototypes and other functioning parts, the industry is experiencing stiff competition. And given NNDM's poor fundamental performance and grim near-term prospects, the company is struggling to stay afloat amid rising competition.

Here’s what could influence NNDM’s performance in upcoming months:

Inadequate Financials

NNDM’s revenue increased 205.9% year-over-year to $1.34 million for the third quarter that ended September 30, 2021. However, its operating loss grew 23.2% from the year-ago value to $24.51 million. The company’s net loss surged 34.1% from the prior-year quarter to $18.24 million, while its loss per share amounted to $0.07 over this period.

Weak Profitability

NNDM’s trailing-12-months asset turnover ratio of 0.01% is 99% lower than the industry average of 0.64%. Also, its ROC and ROA are negative 5.03% and 3.84%, respectively. Furthermore, its trailing-12-months cash from operations stood at a negative $9.65 million compared to the industry average of $112.30 million.

POWR Ratings Reflect Uncertainty

NNDM has an overall grade of F, which equates to a Strong Sell rating in our proprietary POWR Ratings system. The POWR ratings are calculated considering 118 different factors, with each factor weighted to an optimal degree.

Our proprietary ratings system also evaluates each stock based on eight different categories. NNDM has an F grade for Stability and Quality. The stock’s beta of 2.29 is consistent with the Stability grade. In addition, the company’s poor profitability is in sync with the Quality grade.

Of the seven stocks in the F-rated Technology – 3D Printing industry, NNDM is ranked last.

Beyond what I’ve stated above, you can view NNDM grades for Growth, Value, Momentum, and Sentiment here.

Bottom Line

Based on the company’s weak financials, we think NNDM is not strategically positioned to gain from the industry tailwinds in the near term. In addition, the stock is currently trading below its 50-day and 200-day moving averages of $5.66 and $7.19, indicating a bearish sentiment. So, the stock is best avoided now.

How Does Nano Dimension Ltd (NNDM) Stack Up Against its Peers?

While NNDM has an overall grade of F, one might want to consider its industry peer, Materialise NV (MTLS), which has an overall B (Buy) rating.

NNDM shares rose $0.01 (+0.21%) in after-hours trading Monday. Year-to-date, NNDM has declined -47.25%, versus a 25.48% rise in the benchmark S&P 500 index during the same period.

Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate.

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