Desktop Metal Inc. (DM) Shares: Cheap or Risky?

Desktop Metal Inc. (NYSE:DM) saw an upside of 0.67% to $6.89 after adding $0.05 on Tuesday. The 5-day average trading volume is 2,963,335 shares of the company’s common stock. It has gained $7.33 in the past week. An average of 4,702,229 shares of the company has been traded in the last 20 days, and the 50-day average volume stands at 5,459,043.

DM’s 1-month performance is -15.97% or -$1.26 on its low of $6.70 reached on 10/06/21. The company’s shares have touched a 52-week low of $6.70 and high of $34.94, with the stock’s rally to the 52-week high happening on 02/08/21. YTD, DM has lost -60.23% or -$10.32. However, the current price is down -80.29%% from the 52-week high price.


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Insider Transactions

On Jun 15, 119 days have gone by since the last insider trading activity for Desktop Metal Inc. (DM). HSIEH Wen Hsuan (Director) most recently sold 100,000 shares at $12.12 per share on Jun 15. This transaction cost the insider $1,211,570. Director, HSIEH Wen Hsuan, sold 125,000 shares at a price of $12.60 on Jun 14. Then, on Mar 17, Director Hindery Leo J. Jr. sold 250,000 shares at a price of $19.35 per share. This transaction amounted to $4,837,900.

Valuation Metrics

Desktop Metal Inc. (DM) has a trailing price-to-earnings (P/E) ratio of 23.30 for the broader industry and 36.90 for the sector.DM stock has a beta of 0.00. Moving on to other valuation ratios, the trailing price-to-sales (P/S) ratio is 38.80 while the price-to-book (PB) in the most recent quarter is 1.82.

Desktop Metal Inc.’s quick ratio for the period ended June 29 was 12.90, with the current ratio over the same period at 13.50 meaning that DM stock is able to fulfill its debt obligations. As well, the company’s long term debt to equity for the quarter ending June 29 was 0.00, while the total debt to equity was 0.00. In terms of profitability, the gross margin trailing 12 months is -28.40%. The firm’s gross profit as reported stood at -$15.05 million against revenue of $16.47 million.

Earnings Surprise

For the quarterly period ending June 29 this year, Desktop Metal Inc.’s cash and short-term investments amounted to $326.32 million against total debt of $6.25 million. Net income and sales went up compared to those figures reported in the previous quarter. Net income grew 100.0% to $18.98 million, while revenue of $11.31 million was 40.41% off the previous quarter. Analysts expected DM to announce -$0.09 per share in earnings in its latest quarter, but it posted -$0.08, representing a 11.10% surprise. EBITDA for the quarter stood at more than -$41.18 million. DM stock balance sheet for the quarter ending June 29 shows that total liabilities totaled 59.36 million, with total debt at $6.25 million. Shareholders hold equity totaling $260.68 million

Technical Picture

Let’s look briefly at Desktop Metal Inc. (DM) price momentum from a technical analysis perspective. The 9-day relative strength index as at close on 11 October was 35.10% to suggest the stock is trending Neutral, with historical volatility in this time period at 44.50%.

The stock’s 5-day moving average is $6.96, reflecting a -0.84% or -$0.06 change from its current price. DM is currently trading -12.11% above its 20-day SMA, -46.53% above its 100-day SMA. However, the stock’s current price level is away from the SMA50 and SMA200 by -23.37% and -64.16% respectively.

Stochastic %K and %D was 17.47% and 22.58% and the average true range (ATR) pointed at 0.32. The RSI (14) points at 35.86%, while the 14-day stochastic is at 13.96% with the period’s ATR at 0.35. The stock’s 9-day MACD Oscillator is pointing at -0.09 and -0.31 on the 14-day charts.

Analyst Ratings

In the most recent analyst report for Desktop Metal Inc. (NYSE: DM), Oppenheimer launched coverage with a Perform rating. Analysts offering their rating for DM stock have a consensus rating for the stock as Overweight. Currently, 1 brokerage advisors rate DM as a “sell,”, while 2 advise that investors “Hold.” 0 analysts have rated the stock as underweight. 0 rates the stock as overweight while 3 have offered a “buy” rating.

What is DM’s price target for the next 12 months?

Analysts have a consensus price target ranging from a low of $6.17 and a high of $20.00, with their median price target at $10.00. Looking at these predictions, the average price target given by analysts is for Desktop Metal Inc. (DM) stock is $12.83.

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