Why Velo3D Stock Is Plummeting Today
Key Points
Velo3D stock is sinking today after the company reported a big sales decline for Q4.
The company is guiding for strong sales growth this year, but its forecast wasn't enough to prevent sell-offs for its stock.
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Velo3D (NASDAQ: VELO) stock is getting hit hard in Wednesday's trading despite a bullish backdrop for the broader market. The company's share price was down 21.6% as of 2:40 p.m. ET. At the same point in the daily session, the S&P 500 and Nasdaq Composite were up 0.7% and 0.9%, respectively.
Velo3D published its fourth-quarter results after the market closed yesterday, and investors aren't happy with the performance in the period and management's guidance for the current year. Despite the big pullback today, the company's share price is still up roughly 330% over the last year.
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Velo3D stock sinks after Q4 sales decline 25% year over year
Velo3D recorded a loss of $0.54 per share on revenue of $9.4 million in the fourth quarter. The company's revenue was down 25.4% year over year, and its net loss narrowed to $11.6 million -- down from $15 million in last year's quarter. The drop off for sales appears to be at least partially driven by product release timing, but investors were likely hoping for a stronger performance on the heels of big stock gains over the last year.
What's next for Velo3D?
Velo3D is guiding for sales this year to be between $60 million and $70 million -- up from $46 million last year. For reference, the average analyst estimate prior to the company's Q4 released had called for the business to record sales of $62.7 million this year. Management also said that it expected sequential quarterly improvements for gross margins as the year progressed and that it would achieve gross margins above 30% in the second half of 2026. On the other hand, guidance for capital expenditures between $40 million and $50 million may have spooked some investors.
Velo3D's Q4 results and forward guidance weren't terrible, but the stock is a speculative play that has seen huge share-price appreciation over the last year. The business still has a lot of proving to do, and its stock could continue to see big swings in the lead-up to its next quarterly report and major business updates.
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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.
