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Proto Labs Inc (PRLB)
:PRLB
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Proto Labs
(NYSE:PRLB)66Neutral
Positive Factors
Financial Performance
Proto Labs reported better-than-expected financial results for their 4Q24, boosted by increased customer counts and improved margins.
Share Repurchase Program
Proto Labs announced a new $100 million share repurchase program and a plan to increase marketing efforts for its production capacities.
Negative Factors
Earnings Pressure
Ongoing initiatives to drive growth in the production part of PRLB’s business will come with higher investments that are likely to result in declining EPS through much, if not all, of 2025.
Proto Labs (PRLB) vs. S&P 500 (SPY)
Market Cap
$929.10M
Dividend YieldN/A
Average Volume (3M)262.48K
Price to Earnings (P/E)58.0
Beta (1Y)1.71
Revenue Growth-0.59%
EPS Growth-0.85%
CountryUS
Employees2,415
SectorIndustrials
Sector Strength66
IndustryIndustrial Goods
Share Statistics
EPS (TTM)0.65
Shares Outstanding24,233,196
10 Day Avg. Volume232,322
30 Day Avg. Volume262,480
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.85
Price to Cash Flow (P/CF)13.40
P/FCF Ratio13.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$47.50Price Target Upside25.30% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
Proto Labs Business Overview & Revenue Model
Company DescriptionProto Labs (PRLB) is a digital manufacturing company that specializes in rapid prototyping and on-demand production, primarily serving industries such as aerospace, automotive, medical, and consumer electronics. The company offers a range of services including 3D printing, CNC machining, sheet metal fabrication, and injection molding, enabling clients to move from design to prototype and final production with speed and efficiency.
How the Company Makes MoneyProto Labs generates revenue primarily through its on-demand manufacturing services, which cater to a diverse array of industries requiring rapid prototyping and low-volume production. The company's key revenue streams include fees from manufacturing services across its 3D printing, CNC machining, injection molding, and sheet metal fabrication offerings. Proto Labs leverages its proprietary software platform to streamline the production process, allowing for quick turnaround times and competitive pricing. Additionally, the company benefits from strategic partnerships and collaborations that enhance its technological capabilities and market reach, contributing to its sales and profitability.
Proto Labs Financial Statement Overview
Summary
Proto Labs exhibits financial stability with low leverage and strong equity positions. While the company maintains stable gross margins, declining net margins and inconsistent revenue growth are concerns. Cash flow management appears strong, though capital allocation strategies may require attention to ensure sustainable growth.Income Statement
Proto Labs has shown stable gross profit margins around 44-45% over the years, indicating consistent cost management. However, the net profit margin has been fluctuating, with a decline in recent years, notably dropping from a positive 11.7% in 2020 to 3.3% in 2024. The revenue growth rate has been minimal, with a slight decline from 2019 to 2024. EBIT and EBITDA margins have also decreased, suggesting pressure on operating efficiency.70
Positive
Balance Sheet
The company maintains a strong debt-to-equity ratio, significantly below 1, indicating low leverage and financial stability. Return on equity is modest, with fluctuations due to varying net income levels. The equity ratio has remained high, showcasing a solid equity base compared to total assets, which supports financial stability.75
Positive
Cash Flow
Operating cash flow is consistently positive, but free cash flow growth has been inconsistent. The free cash flow to net income ratio is favorable, indicating effective cash generation relative to earnings. However, significant fluctuations in investing and financing cash flows suggest potential risks in capital allocation strategies.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 500.89M | 503.88M | 488.40M | 488.10M | 434.39M | Gross Profit |
| 223.20M | 221.99M | 215.47M | 222.69M | 217.83M | EBIT |
| 19.91M | 28.17M | 151.88M | 40.34M | 59.84M | EBITDA |
| 61.30M | 66.58M | 66.37M | 80.83M | 92.43M | Net Income Common Stockholders |
| 16.59M | 17.22M | -103.46M | 33.37M | 50.87M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 103.09M | 102.80M | 80.13M | 77.51M | 161.69M | Total Assets |
| 743.51M | 772.35M | 802.17M | 928.58M | 744.20M | Total Debt |
| 3.52M | 5.48M | 21.35M | 7.44M | 13.33M | Net Debt |
| -85.56M | -78.31M | -35.20M | -58.48M | -114.27M | Total Liabilities |
| 73.36M | 77.06M | 104.52M | 100.09M | 99.85M | Stockholders Equity |
| 670.15M | 695.29M | 697.65M | 828.49M | 644.36M |
| Cash Flow | Free Cash Flow | |||
| 77.83M | 45.16M | 40.39M | 21.03M | 59.96M | Operating Cash Flow |
| 77.83M | 73.27M | 62.08M | 55.24M | 106.97M | Investing Cash Flow |
| -13.58M | -4.55M | -43.09M | -94.66M | -95.47M | Financing Cash Flow |
| -58.55M | -41.86M | -27.92M | -22.20M | -10.73M |
Proto Labs Technical Analysis
Negative
37.91
Price Trends
40.37
Negative
38.55
Negative
34.50
Positive
Market Momentum
-0.93
Positive
38.05
Neutral
24.93
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRLB, the sentiment is Negative. The current price of 37.91 is below the 20-day moving average (MA) of 41.00, below the 50-day MA of 40.37, and above the 200-day MA of 34.50, indicating a neutral trend. The MACD of -0.93 indicates Positive momentum. The RSI at 38.05 is Neutral, neither overbought nor oversold. The STOCH value of 24.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PRLB.
Proto Labs Risk Analysis
Proto Labs disclosed 35 risk factors in its most recent earnings report. Proto Labs reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Proto Labs Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $3.23B | 29.37 | 23.12% | 1.87% | 29.71% | 31.32% | |
66 Neutral | $929.10M | 57.97 | 2.43% | ― | -0.59% | -0.85% | |
66 Neutral | $302.42M | 20.53 | 5.60% | ― | 6.71% | 243.36% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% | |
50 Neutral | $420.42M | ― | -113.84% | ― | -12.26% | -431.20% | |
49 Neutral | $589.00M | ― | -3.50% | ― | -4.57% | 84.12% | |
46 Neutral | $686.09M | ― | -14.34% | ― | -8.26% | 17.82% |
* Industrials Sector Average
Performance Comparison
PRLB
Proto Labs
38.00
0.45
1.20%
DDD
3D Systems
2.94
-2.11
-41.78%
CAMT
Camtek
68.80
-7.29
-9.58%
FARO
Faro Technologies
29.28
7.57
34.87%
SSYS
Stratasys
9.83
-2.60
-20.92%
MTLS
Materialise
5.01
-0.35
-6.53%
Proto Labs Earnings Call Summary
Earnings Call Date: Feb 7, 2025 | % Change Since: -14.60% | Next Earnings Date: May 2, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with significant achievements in expanding gross margins, cash generation, and investments to drive future growth. However, these were tempered by revenue declines, challenges in prototyping, and costs associated with the German facility closure. The company is optimistic about its production capabilities and growth strategy for 2025.Highlights
Fourth Quarter Financial Performance
Fourth quarter financial results exceeded expectations with strong earnings and cash flows, generating $78 million of cash from operations.
Expansion of Gross Margin
In 2024, Proto Labs expanded its consolidated gross margin and increased earnings per share.
Growth in Production Use Cases
Customers using the combined offer grew 50%, and revenue from production use cases outgrew prototyping.
Investments for Future Growth
Investments in marketing, sales enablement tools, and production capabilities to drive revenue growth in 2025 and beyond.
Strong Cash Generation
Generated $77.8 million in cash from operations in 2024, up from $73.3 million in 2023.
Share Repurchase Program
Returned $60.3 million to shareholders in 2024 through repurchases and announced a new $100 million share repurchase program.
Lowlights
Revenue Decline
Fourth quarter revenue was $121.8 million, down 3.1% year-over-year in constant currencies.
Challenges in Prototyping
Prototyping revenue was more sensitive to macroeconomic conditions, experiencing headwinds from manufacturing contraction.
German Facility Closure Costs
Incurred $5.6 million of costs related to the closure of an injection molding facility and discontinuation of select 3D printing operations in Germany.
Decreased Earnings Per Share
Fourth quarter non-GAAP earnings per share were $0.38, down $0.09 sequentially due to lower volume and lower gross margin.
Company Guidance
During the Proto Labs Fourth Quarter and Fiscal Year 2024 Earnings Call, the company provided several key metrics and guidance for future performance. Proto Labs reported generating $78 million in cash from operations for the year 2024 and disclosed a 50% growth in customers utilizing their combined offerings, with revenue per customer also expanding. The network revenue grew by 21.3% year-over-year, reaching $100.4 million. The company experienced a consolidated non-GAAP gross margin increase to 45.2% for the full year, with factory gross margin rising to 48.3% and network gross margin increasing to 32.9%. Proto Labs served 52,000 customer contacts in 2024, with revenue per customer growing by 3% year-over-year. Looking ahead, Proto Labs plans to focus on driving revenue growth in 2025 with several strategic investments, including marketing, sales enablement tools, and improving production capabilities. The company anticipates first-quarter 2025 revenue between $120 million and $128 million, with a non-GAAP effective tax rate estimated between 26.5% and 27.5%. Proto Labs aims to continue its transformation and growth trajectory by expanding its production offerings and reinforcing its core prototyping services.Proto Labs Corporate Events
Stock BuybackBusiness Operations and Strategy
Proto Labs Launches $100 Million Stock Buyback Program
Positive
Feb 7, 2025
Protolabs announced a new $100 million stock repurchase program on February 7, 2025, highlighting its strategic initiative to enhance shareholder value. The company reported a slight decrease in revenue for 2024 compared to 2023, but showed improvements in gross margins and cash flow, reflecting its ongoing transformation efforts and focus on expanding production capabilities.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.