Is Desktop Metal (NYSE:DM) moving to revert?


USD 2.49  0.10  3.86%   

As many millenniums are excited about machinery space, it is only fair to summarize Desktop Metal against current market trends. As we have suggested previously, Desktop Metal is beginning its pull down as stakeholders shift to be more bearish due to the increased sector volatility. Desktop Metal hyperactively responds to market trends. A great deal of the actions of the company stock price movements has been a reflection of what is happening in the market overall. Steady primary indicators of the company may denote signs of medium-term price drift for stakeholders. The stock continues to experience a very aggressive trading activities.
Published over three months ago
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The company's average rating is Buy from 5 analysts. Do analysts base this consensus on technical analyses? We know that typical technical analysis utilizes price momentum, patterns, and trends looking at historical prices. It aims to identify signals based on Desktop Metal market sentiment investors' perception of the future value of Desktop. Let us look at a few aspects of Desktop technical analysis.
Using predictive technical analysis, we will analyze different prices and returns patterns and diagnose historical swings to determine the real value of Desktop Metal. In general, we focus on analyzing Desktop Metal stock price patterns and their correlations with different microeconomic environment and drivers. We also apply predictive analytics to build Desktop Metal's daily price indicators and compare them against related drivers such as momentum indicators and various other types of predictive indicators. Using this methodology combined with a more conventional technical analysis and fundamental analysis, we attempt to find the most accurate representation of Desktop Metal's intrinsic value. In addition to deriving basic predictive indicators for Desktop Metal, we also check how macroeconomic factors affect Desktop Metal price patterns. Please read more on our technical analysis page or use our predictive modules below to complement your research.
Sophisticated investors, who have witnessed many market ups and downs, frequently view the market will even out over time. This tendency of Desktop Metal's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy. Please use the tools below to analyze the current value of Desktop Metal in the context of predictive analytics.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Desktop Metal. Your research has to be compared to or analyzed against Desktop Metal's peers to derive any actionable benefits. When done correctly, Desktop Metal's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy towards taking a position in Desktop Metal.

How important is Desktop Metal's Liquidity

Desktop Metal financial leverage refers to using borrowed capital as a funding source to finance Desktop Metal ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Desktop Metal financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Desktop Metal's total debt and its cash.

How does Desktop utilize its cash?

To perform a cash flow analysis of Desktop Metal, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Desktop Metal is receiving and how much cash it distributes out in a given period. The Desktop Metal cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.

Breaking it down

Desktop Metal has a beta of 2.6118. Let's try to break down what Desktop's beta means in this case. As returns on the market increase, Desktop Metal returns are expected to increase less than the market. However, during the bear market, the loss on holding Desktop Metal will be expected to be smaller as well. The beta indicator helps investors understand whether Desktop Metal moves in the same direction as the rest of the market, and how volatile (i.e., risky) it is compared to the market (i.e., selected benchmark). In other words, if Desktop deviates very little from the market, it does not add much risk to the portfolio, but it also doesn't increase the expected returns. The entity generated the yearly revenue of 112.41 M. Annual Net Loss to common stockholders was (240.33 M) with gross profit of 20.49 M.

Is Desktop Metal growth viable after the pull down?

Kurtosis is down to 20.41. It may denote a possible volatility pull down. Desktop Metal is displaying above-average volatility over the selected time horizon. Investors should scrutinize Desktop Metal independently to ensure intended market timing strategies are aligned with expectations about Desktop Metal volatility. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Desktop Metal's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Desktop Metal's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Desktop Metal Implied Volatility

Desktop Metal's implied volatility exposes the market's sentiment of Desktop Metal stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Desktop Metal's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Desktop Metal stock will not fluctuate a lot when Desktop Metal's options are near their expiration.

Our Bottom Line On Desktop Metal

While few other entities in the computer hardware industry are either recovering or due for a correction, Desktop may not be as strong as the others in terms of longer-term growth potentials. To conclude, as of the 4th of June 2022, we believe that at this point, Desktop Metal is undervalued with very low odds of distress within the next 2 years. Our current 'Buy-Sell' recommendation on the company is Hold.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of Desktop Metal. Please refer to our Terms of Use for any information regarding our disclosure principles.

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