Fathom Digital Manufacturing Corporation (NYSE: FATH) reported mixed Q4 results, topping revenue estimates driven by robust order growth. However, the company reported an adjusted loss for the quarter.
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Shares of one of the largest on-demand digital manufacturing platforms in the U.S. gained 1% on March 4, but lost 5.2% during after-market trading hours, following the results.
Q4 Numbers
Positively, revenues jumped 132.8% year-over-year to $44.3 million, and exceeded consensus estimates of $43.3 million. Driven by acquisition-related activity and growth within Fathom’s strategic accounts, the increase in revenues reflects a 25.9% surge in total orders to $49.1 billion.
Further, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) grew ten times to $10.5 million, compared to $1.5 million reported for the year-ago quarter. Likewise, adjusted EBIDTA margin improved by 430 bps to 22.6%.
However, the company reported an adjusted loss of $1.7 million versus the adjusted loss of $5.0 million in the prior-year period.
The company initiated trading on the New York Stock Exchange under the ticker “FATH” in December 2021.
FY2022 Outlook
Based on management’s current projections and excluding the impact of potential new acquisitions, management issued financial guidance for FY2022.
The company projects revenues to grow 23% year-over-year to be in the range of $182 million to $192 million.
Adjusted EBITDA is forecast to be in the range of $40 million to $45 million, implying a 26% year-over-year growth rate.
CEO Comments
Looking ahead, Fathom Digital CEO, Ryan Martin, commented, “Our focus remains on further strengthening Fathom’s breadth of leading offerings as we continue to invest in the business. Additionally, we intend to maintain Fathom’s role as an active consolidator in a large and highly fragmented $25 billion industry.”.
He further added, “By leveraging our proven business model and attractive financial profile, we expect to build upon our solid performance and drive long-term profitable growth in 2022 and beyond for the benefit of our shareholders”.
Analysts Recommendation
Consensus among analysts is a Strong Buy based on 3 unanimous Buys. The average Fathom Digital stock forecast of $11.33 implies 34.24% upside potential to current levels.
Investors Weigh In
TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Fathom Digital, with 28.7% and 11.2% of investors increasing their exposure to FATH stock over the past 7 days and 30 days, respectively.
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