Materialise NVStock Bottom is Materializing

3D printing additive manufacturer Materialise NV NASDAQ: MTLS stock has been in a steep fall since peaking out at $87.40 back in February 2021. This is unusual has the 3D printing sector has been on a tear this year with the commercialization and applications of the technology. Additive manufacturing is the 3D printing that “adds” layer upon layer to build as opposed to subtractive manufacturing that ships away from a large block like a sculptor to create a product. The Company is a post-pandemic benefactor as the reopening accelerates with COVID vaccinations. Materialise makes the bulk of revenues from the medical segment and seeks to expand deeper into virtual eyewear and customized footwear industries. Cathie Wood of ARK Invest is an investor and believe the worldwide 3D printing market can grow at a 60% compound annual rate by 2025. The Iconic money manager owns shares in the ARK Innovation NYSEARCA: ARKK ETF , at much higher prices. Risk-tolerant investors looking for exposure in the additive manufacturing segment of 3D printing can watch for opportunistic pullbacks to scale in.

Q2 FY 2021 Earnings Release

On June 30, 2021, Materialise released its second-quarter fiscal 2021 earnings report for the period ended in March 2020. The Company reported a profit of $0.08 per share versus consensus analyst estimates for a loss of (-$0.03) per share, an $0.11 per share beat. Revenues grew 33.6% year-over-year (YoY) to $60.30 million, beating consensus estimates by $2.03 million. Executive Chairman Peter Leys said, “Our strong second quarter results reflect our swift recovery from the COVID-19 crisis: on a sequential basis, our revenues grew by 11.3% compared to the first quarter of 2021 and our Adjusted EBITDA grew by almost 30% compared to the same quarter. More importantly, in addition to a solid recovery, our second quarter 2021 results also show effective growth relative to our pre-pandemic results: compared to the same period in 2019, our revenues grew by 5% and our Adjusted EBITDA grew by 37%. We are well positioned and determined to accelerate that growth, including through the use of the proceeds from the public offering of new shares we recently completed (generating US $110.4 million in total gross cash proceeds, including US $14.4 million from the sale of 600,000 additional shares in connection with the underwriters’ exercise of their option to purchase such shares in July).”

Guidance Update

Executive Chairman Leys stated, “Assuming that the current positive, albeit fragile and fairly diverse, global trend of businesses gradually recovering from the COVID-19 pandemic continues, we currently expect our consolidated revenues for 2021 to exceed their pre-pandemic level during 2019 (197,000 kEUR), with the likelihood of coming close to 200,000 kEUR. As is traditionally the case for our business, we expect a particularly strong fourth quarter. As our revenues grow, we intend to increase our operational expenses accordingly, with a view to supporting and accelerating our growth in the near future. Currently, we believe that Adjusted EBITDA for 2021 will reach up to 25,000 kEUR.” 

Fund Raise

Leys concluded in the conference call, “These we believe, very solid and promising results underscore what we have explained during our recent capital increase. The newly raised funds will not just be used to help us recover or to help us return to growth, which are things that we are already experiencing today. In fact, we intend to use these funds to further accelerate the key growth drivers of our business. In particular, the continued rollout of our Magics and Mimics software platforms, the expansion of our presence in the CMF markets and the go-to-market of our wearables platforms in general, and of Materialise Motion in particular.”

MTLS Opportunistic Price Levels

Using the rifle charts on the weekly and daily time frames provides a broader view of the landscape for MTLS stock. The weekly rifle chart has been on a steep decline from the 80s to the low 20s in 2021. Shares hit recent lows at the $18.44 Fibonacci (fib) level. The weekly 5-period moving average resistance (MA) finally flattened at $21.40 but the 15-period MA is still falling at $23.87. The weekly stochastic is forming multiple mini pups (stairstep pattern) under the critical 20-band. In order to sustain a bottom and bounce, the weekly stochastic will need to rise up through the oversold 20-band level. The daily rifle chart uptrend is stalled with the flat 5-period MA at $22.25 and 15-period MA at $21.63. The trading channel is evident between $24.53 and $18.44. The daily market structure high (MSH) sell triggered under $21.64 with a daily market structure low (MSL) buy trigger above the $20.78 price level. This is pretty tight as the Bollinger Bands (BBs) also indicate a tightening range on the compression which precedes a price expansion. Prudent investors can look for opportunistic pullback levels at the $20.78 daily MSL trigger, $19.67 fib, $18.44 fib, $17.51 fib, and the $15.67 fib. Upside trajectories range from the $29.90 fib up towards the $40.13 fib level.