By Sam Boughedda
Xometry, Inc. (NASDAQ:XMTR), reported earnings before the open on Wednesday, missing expectations, sending its shares almost 40% lower and prompting a flurry of analyst downgrades and price target cuts.
Both RBC Capital and JPMorgan downgraded the stock, while Goldman Sachs, Citi, UBS, Loop Capital, Lake Street Capital Markets, and Craig-Hallum cut their price targets on Xometry shares.
In a note to clients on Thursday, JPMorgan analysts downgraded Xometry to Neutral from Overweight, cutting the firm's price target on the stock to $21 from $55 per share.
The analysts told investors in a research note that Xometry saw buyer demand moderate in the fourth quarter due to the macro environment.
"XMTR responded by lowering prices in an attempt to take share, but this did not stimulate demand as much as expected and instead impacted marketplace gross margin and contributed to a 1Q &2023 revenue/ADJ. EBITDA guide below expectations," they wrote.
They added that the firm remains bullish on XMTR's long-term opportunity and positioning as the leading on-demand manufacturing marketplace but thinks the "execution risk is elevated."
Meanwhile, RBC Capital Markets analysts downgraded XMTR to Sector Perform from Outperform, lowering the firm's price target on the stock to $21 from $45 per share.
"Our previous bull thesis was predicated on continued market share gains in the fragmented global manufacturing market by leveraging their proprietary AI algorithms as well as Thomas synergies. While in some regards we believe that thesis remains, due to macro pressures and volatility in the model, we are rethinking our growth, margin and valuation framework," wrote the analysts.
They added that "while buyer adds remain strong, supplier behavior continued to evolve as they again took jobs at lower prices while buyers traded off longer lead times for lower prices."
Like JPMorgan, RBC said they continue to see the potential long-term value in the Xometry marketplace but are stepping to the sideline.