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Why Nano Dimension Sank 20.7% in the Last Month of 2021

What happened

Shares of Nano Dimension (NASDAQ: NNDM) sank 20.7% in December, according to data from S&P Global Market Intelligence. There doesn't appear to have been any business-specific news driving the pullback, but the company's share price lost ground as the market broadly took a more cautious stance on tech stocks with highly growth-dependent valuations.

NNDM data by YCharts

With the Federal Reserve indicating that it planned to scale back its bond purchases and raise interest rates in 2022, investors sold out of positions in risky growth stocks last month. Nano Dimension actually had some positive updates for its shareholders, but these announcements weren't enough to stop its stock from getting caught up in the broader sell-off for speculative stocks.

Image source: Getty Images.

So what

Nano Dimension's Dragonfly machines use 3D-printing technology for the additive manufacturing of semiconductors and other complex electronics components. This approach to building and modifying chips can make it much easier for hardware makers and researchers to construct and test variations on designs.

Nano Dimension published a press release on Dec. 6 announcing that it sold its first two Dragonfly 4 3D-AME machines. The Israel-based 3D-printing specialist also published a press release on Dec. 9 announcing that it had received ISO 9001 certification for quality management, signifying it had met standards in categories including customer focus, support, and senior management's efforts to empower employees and deliver value.

Now what

Nano Dimension published a press release on Jan. 5 announcing it had acquired Global Inkjet Systems (GIS), a developer and supplier of electronics, software, and ink-delivery systems. The announcement noted that GIS had closed the 12-month period ending March 31, 2021 with sales of roughly $10 million and a 51% gross margin. The acquisition deal saw Nano Dimension pay $18.1 million in cash upfront and contains provisions for additional payments between $1.3 million and $10.7 million over the next 27 months depending on GIS' financial performance.

Nano Dimension now has a market capitalization of roughly $977 million and is valued at approximately 32.5 times this year's expected sales. Across its last three reported quarters, the company reported revenue of $2.96 million -- an increase of 107% compared to the prior-year period. The business has been expanding at a rapid clip, and 3D printing for semiconductor manufacturing is a young market, but the company's growth-dependent valuation sets the stage for potentially volatile stock swings.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.


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