Shares of Small-cap Electrical Equipment & Parts company Nano Dimension were up 3.7% during today's morning session, as the S&P 500 posted a 0.0% change. Today's upwards movement shows that investor interest in NNDM stock is strong -- but how closely have they studied the company's margins?
While Nano Dimension's gross margins for the last year are positive, we are concerned that the company's operating margins are in the red. Gross margins take into account only the cost of revenue, or variable costs -- meaning the cost directly associated with producing the products or providing the service offered by the company.
Operating margins, on the other hand, take into account the company's overhead as well. Overhead, also called fixed costs, includes the company's rent, salaries for personnel not included in cost of revenue, equipment and supplies, amortization, and depreciation. Operating margins tell you about how efficiently Nano Dimension is run, and gross margins tell you how profitable its product line is.
| Date Reported | Revenue ($ k) | Cost of Revenue ($ k) | Gross Margins (%) | YoY Growth (%) |
|---|---|---|---|---|
| 2022-03-31 | 10,493 | -9,371 | 11 | -64.52 |
| 2021-03-11 | 3,399 | -2,334 | 31 | 10.71 |
| 2020-03-10 | 7,070 | -5,084 | 28 | 100.0 |
| 2019-03-14 | 5,100 | -4,366 | 14 | 135.9 |
| 2018-03-14 | 829 | -1,152 | -39 | 87.81 |
| 2017-03-14 | 46 | -193 | -320 |
By reviewing several years of Nano Dimension's income statemet, we can see that, although gross margins are currently positive, the company has on average lost money on each of its sales with an average gross margin of -45.8%. Cost of revenue has been changing at a rate of -0.0%, while its revenues have a growth rate of 0.0%. As a result, gross margins have a delta of -0.5%.
| Date Reported | Total Revenue ($ k) | Operating Expenses ($ k) | Operating Margins (%) | YoY Growth (%) |
|---|---|---|---|---|
| 2022-03-31 | 10,493 | -84,043 | -790 | 24.76 |
| 2021-03-11 | 3,399 | -36,762 | -1050 | -400.0 |
| 2020-03-10 | 7,070 | -16,821 | -210 | 29.29 |
| 2019-03-14 | 5,100 | -15,884 | -297 | 85.25 |
| 2018-03-14 | 829 | -16,365 | -2013 | 89.73 |
| 2017-03-14 | 46 | -8,867 | -19596 |
The table above tells us that, on average, Nano Dimension has not been profitable over the last four years, which should be a warning sign to prospective investors. One bright spot, however, is that the company's operating margins are growing at an average yearly rate of 41.4%.
