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taking a long-term view ahead of proto labs\' q1 2019 report

by:QY Precision      2019-09-02
In the revenue season, it is often difficult to find signals in noise.
When the original laboratory (NYSE: PRLB)
It was reported that the company\'s share price rose strongly last quarter, down 28%. term concerns.
Investors should not be too distracted by short selling
Long term forecasts, instead focusing on longer term forecasts
Our investment tells us.
As a shareholder of Proto Labs, here\'s what I saw in the company report of April 25. CNC Machine.
Image source: Proto LabsTop line growth while revenue growth from one quarter to the next is usually confusing, I would like to see this figure clear 20%.
This is my benchmark as a company growth investor in the portfolio.
In fact, when Proto Labs reported a year\'s report in 2018, it was easy to exceed this mark.
The final result of 29% growth.
If the company falls below this threshold every year, it is a dangerous signal that the results may slow down and that investors are concerned about potential issues.
Gross profit target for Gross Labs is at least 56% annual profit margin, up from 2017 recently.
In the fourth quarter, however, the figure fell to 52. 5%.
Management claims that this decline is mainly due to their recent acquisition of the rapid manufacturing group (RAPID)
And some inefficiency in turning to a new computer.
Control or CNC of manufacturing plant.
While the Company expects gross profit margin to remain at this low level in the first quarter, neither of the above issues appears to be long-term.
However, looking forward to 2019, management should achieve the goal of continuous profit margin improvement in the coming year and gradually return to this phase50% level.
When the company quickly acquired in November, the expansion was successful.
2017, it increases the ability to quickly prototype and manufacture sheet metal products while expanding CNC capabilities.
As mentioned earlier, there was an integration problem, mainly to get the sales staff of the company to speed up new services and products.
Acquisitions are often a challenge for the management team, and investors want to see how the deal is made.
Pay close attention to the sales staff\'s ability to promote new services and whether sheet metal product orders do increase the company\'s revenue by the end of the year.
Proto Labs announced that they have more than 2017 developers using fast prototyping and production services, with a 35,000 increase in user base.
The figure grew to 41,000 last year, up 18%.
The company says it is considering actively increasing the number of customers in the coming years.
Management plans to invest heavily in sales staff, customer technical resources and data analytics to attract and retain new customers.
I would like to see this return on investment as the number of developers using their services continues to grow strongly.
In 2014, CEO Victoria Vicky Holt faced the goal of increasing revenue from the original lab to $1 billion.
As the company worked towards that goal, she helped Proto Labs become the world\'s largest digital manufacturer.
Under her leadership, the company has doubled the number of active developers and expanded to new areas such as the medical equipment market and the lighting industry.
During this time, the company\'s revenue increased from $0. 135 billion in 2013 to $0. 445 billion last year, more than double.
Holt has been in charge of Proto Labs for more than five years and most of my personal investment papers are based on her leadership.
While there is no indication that she is ready to change, this is still a potential variable that I am looking.
If she is leaving, I have to seriously consider whether I want to continue holding this stock, because I believe leadership is one of the biggest factors in the success of the company.
Proto Labs will report before the market opens in April 25.
While quarterly results may not be sufficient as a basis for investment decisions, they will provide us with some clues about how our company is doing.
Over time, the trends we follow have made our understanding of the business much better than the results of just one quarter.
Louis Brooks owns a stake in Proto Labs.
The Fool\'s suggestion of holding shares in the original laboratory.
The disorganized fool has a disclosure policy.
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