Why Nano Dimension shares fell 28.4% in February

What happened

Actions of Nano dimension (NASDAQ: NNDM) fell 28.4% in February, according to data from S&P Global Market Intelligence. There wasn’t a lot of company-specific news behind the pullout. The 3D printing specialist has had an incredible run and posted fantastic gains, but was caught in a sell-off for growth-dependent tech stocks at the end of last month.

NNDM given by YCharts

Despite recent declines, Nano Dimension stock has climbed about 653% in the past year. Its machines could pave the way for revolutionary breakthroughs, but that doesn’t mean the young company is immune to market volatility.

The Dragonfly 2020 Pro 3D printer.

Image source: Nano Dimension.

So what

Substantial gains in Treasury bond yields prompted some investors to shift away from tech stocks in favor of safer investment vehicles in February. The momentum has raised questions as to whether the incredible race of technology is stopping.

Nano Dimension’s share price has skyrocketed over the past year amid signs of long-term demand for the company’s 3D printing machines, which are designed for additive production of semiconductors and other high-end electronic components. The company has a market capitalization of around $ 2.2 billion and is valued at around 436.5 times expected sales this year, even after recent massive sales.

Now what

Amid a continued pullback in growth-dependent stocks, Nano Dimension slipped again at the start of March trading. The company’s share price has fallen about 14.5% on the month so far.

NNDM Chart

NNDM given by YCharts

The coronavirus pandemic has had an impact on short-term demand for its DragonFly 3D printers, but management is seeing relatively encouraging performance for machine upgrades and initial device sales. For fiscal 2020, Nano Dimension forecasts revenue of approximately $ 3.4 million. The company also estimates it has approximately $ 990 million in cash reserves against zero debt as of Jan.31, 2021, and it is preparing for a substantial increase in sales in anticipation of a rebound in demand.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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About Walter Bartholomew

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