Costco Wholesale Corporation (COST), ExOne Co (XONE): Thursday’s Top Upgrades (and Downgrades)

Our third and final featured analyst recommendation of the day is the “hot new thing” in the 3-D printing space, billed as a more flexible alternative to industry pioneers Stratasys, Ltd. (NASDAQ:SSYS) and 3D Systems Corporation (NYSE:DDD) because ExOne Co (NASDAQ:XONE) specializes in “printing” (better understood as on-site manufacturing) objects in sand and metal, and not just plastic.

ExOne Co (NASDAQ:XONE) scored a new buy rating from Canaccord Genuity this morning for the virtue of its inhabiting “the fastest growing segment within additive manufacturing (AM), metal parts production, where we see a scarcity of suppliers and a high likelihood of consolidation.” Canaccord sees ExOne Co (NASDAQ:XONE) gaining a higher profile at an upcoming 3-D printing trade show, followed by longer-term growth as industrial customers move “from low-unit-volume evaluation phase to higher-unit-volume production,” and the company begins profiting from its “production service centers (PSCs)” as well.

ExOne had better grow quickly, though, because anything less than uber-growth will be hard-pressed to justify the stock’s $600 million-plus market cap. Unprofitable today, and costing more than 80 times the profits that analysts hope it might earn next year, ExOne is one very pricey stock indeed. It’s also burning cash, and at a rate even faster than its GAAP losses are piling up.

That makes it hard to stick an accurate value on the stock right now, there being no real profits of any sort to tie a valuation to. That said, Canaccord is positing a $55 price target. Whether the unprofitable company will get there is anybody’s guess.

Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends Costco Wholesale (NASDAQ:COST) and ExOne. The Motley Fool owns shares of Costco Wholesale.

The article Thursday’s Top Upgrades (and Downgrades) originally appeared on Fool.com and is written by Rich Smith.

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