Xometry (XMTR)
Entry:
Price target: 41.00-43.00
Second PT:
Xometry is a leading provider of on-demand high-precision manufacturing and prototyping solutions. Specializing in CNC machining and 3D printing, the company offers services in over 80 metals and plastic materials, empowering innovators to turn bold ideas into reality.. Its proprietary software platform enables product designers and engineers to instantly access the capacity of a nationwide network of manufacturing facilities, and it prides itself on its new AI approach to enhancing its consumers’ experience.
Though 3D printing has been around for decades, it is advancing rapidly, reshaping industries and economies with profound implications. Key sectors poised to benefit include manufacturing, healthcare, and construction. For example, 3D printing supports decentralized production, reducing reliance on global supply chains and enabling local, just-in-time manufacturing. In healthcare, it facilitates the creation of custom prosthetics, implants, and even the potential bioprinting of organs, significantly improving patient outcomes. Meanwhile, in construction, 3D-printed homes and infrastructure can lower costs, shorten project timelines, and reduce environmental impacts, addressing critical global housing shortages. Looking further ahead, advances in AI could one day enable global users to feel materials simultaneously, pushing the boundaries of remote collaboration and design.
Among companies in the 3D printing and manufacturing sector, Xometry stands out for its strong fundamentals and history of rapid growth. Five years ago, Xometry generated approximately $80 million in annual revenue. Today, that figure has surged by over 500% to $525 million (TTM), a remarkable achievement for a company with a $1.7 billion valuation. Its balance sheet reflects sound management, boasting a healthy 2:1 ratio of $680 million in assets to $360 million in liabilities. However, areas for improvement remain, particularly in profit margins and free cash flow, both of which are currently negative. Despite these challenges, earnings are projected to trend closer to profitability within the next 12 months, potentially boosting investor confidence. As profitability improves, free cash flow is expected to follow suit, enhancing Xometry’s overall financial strength and positioning the company for sustained long-term growth.
Please note that this may take beyond this week to come around to price targets.
Broadcom (AVGO)
Entry: Unlock
Price target: 235.00-240.00
Second PT:
Broadcom broke out into a new all time high last week, reaching the $1 trillion market cap for the first time following the company’s quarterly earnings release. The global semiconductor and software company exceeded earnings expectations, posting $1.42 EPS, vs the $1.38 estimates; however they fell just short of revenue forecasts at $14.05 billion vs the anticipated $14.09 billion.
What really took the spotlight on the report was the company’s soaring demand for ethernet networking parts, which are used to tie together thousands of AI chips. The rise of generative AI has made these parts a hot commodity, so much so that they helped Broadcom grow their AI revenue to $12.2 billion for the year, a 220% jump from last year. The company’s leaders went on to maintain an optimistic outlook for what’s to come, stating that they see an ongoing opportunity for the next three years from AI.
Diving into the company has a whole, Broadcom had a year of struggle in the past twelve months. Although revenue was growing tremendously, their investment in VMware became a burden and drained it of its net income. For the first three quarters of the year, AVGO’s profits fell, reaching negative territory last quarter. This has kept the stock at bay for months, with buyers too cautious to keep on buying without a clear turnaround. This earnings report provides that confidence, as it boosted net income back to higher levels than 2023, and it promised higher returns in the coming year.
Risks to Consider
The earnings gap-up that AVGO posted last week could trigger a multi-week/month rally as confidence reignites and new eyes are on it; however it is important to note that it is trading at an all time high during a time where markets are also in an “overbought” position. Broadcom’s earnings were notable enough to earn them a spot on our watchlist, but they still have work to do to improve their bottomline. Investors want to see further profit growth to justify AVGO’s P/E of 159x, which trades far above the attractive 15-25 range. This can be overlooked for now as profit margins are expected to grow, but they must deliver on those expectations to keep the stock at these highs next year.
Please note that this may take beyond this week to come around to price targets.
Sweetgreen (SG) - Hitlist (Meaning we are looking to capitalize on the downside movement through shorting / buying puts on this stock)
Current price: 34.00
Downside price target: 29.00-31.00
Second downside PT:
Sweetgreen has had a strong run this year, with its stock more than tripling from its lows. However, investor sentiment has shifted in recent weeks, following the stock’s climb to a new yearly high. Once compared to Chipotle and more recently to CAVA, the Los Angeles-based salad chain’s growth appears to have been overhyped, driven by the optimistic assumption of consistently high growth.
While Sweetgreen continues to post quarterly revenue growth, the slowing pace is a concern. Over the past four quarters, growth has declined from an average of 25% to just 13% in the most recent report. Despite rising revenue, the company remains unprofitable, with negative free cash flow deepening to -$26 million.
The fast-casual industry is fiercely competitive, where stagnation often spells decline. Sweetgreen’s $17+ average meal price makes it pricier than both Chipotle and CAVA, which is hard to justify for a salad, especially in today’s economic climate. Revenue increases in recent years can largely be attributed to annual price hikes averaging 5%, a strategy that is unlikely to be sustainable. As price increases slow, revenue growth is expected to decelerate further, leaving investors with diminished returns.
Please note that this may take beyond this week to come around to price targets.
You've reached the end of our complimentary public watchlist. Unlock for the full list by becoming a member of our Hyper Stocks community. Click here for more information.
You've reached the end of our complimentary public watchlist. Unlock for the full list by becoming a member of our Hyper Stocks community. Click here for more information.
You've reached the end of our complimentary public watchlist. Unlock for the full list by becoming a member of our Hyper Stocks community. Click here for more information.
You've reached the end of our complimentary public watchlist. Unlock for the full list by becoming a member of our Hyper Stocks community. Click here for more information.
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The stocks posted above are the preliminary stocks and set ups we’ll be watching this week. All price points are subject to change based on market performance and sector health. Please do your own research and analysis on these companies/charts before taking on any set ups. Trade at your own risk and as always, good luck! Let’s have a fantastic week.