I had been in PRLB but sold out when I was selling companies with very high PE’s but slow rates of growth. It was as high as $93.00 six months ago but now is at $57.60.
Revenue last four quarters: 46 53 55 56
Adj EPS last four quarters: 41 45 44 43 - that’s basically flat to down!
Great company. Great concept. Possibly good future. But I wasn’t willing to spend almost 60 times earnings for that kind of growth when it was at 93, and I’m still reluctant to spend 33 times earnings now that it’s at $57.60 for this kind of growth. I have lots of stocks that are growing faster with lower PE’s.
I’ve been posting some thoughts about PRLB over on the PRLB board. Please feel free to use any of that if you want. I think long term it’s a great buy. It’s currently at the best P/E ratio you can buy since the IPO. Not exactly “cheap” but as good as it has been.
I think long term it’s a great buy. It’s currently at the best P/E ratio you can buy since the IPO.
But Chad, Aside from the 3D printing hype it got caught up in, why should a company whose last four quarterly EPS’s have been 41, 45, 44, 43, have a PE of 33+? Why should it have a PE over 20? Over 15? Sure it’s cheaper than it’s been, but that’s because it was crazy expensive before. Would love to hear your take.
I agree that it’s not exactly cheap and that it did get caught up in the 3D printing craze before it even had 3D printing capabilities. I agree that to buy today is to buy with expectations baked in slightly more than it’s been growing. PRLB has been consistently growing EPS YoY on average about 43% since its IPO, though it did take a hit this year due to the acquisition of Fineline and growth in G&A spending for sales and marketing. I think they can continue to grow at least 20-25% for a few years. They still have a market cap under $2B so they have a lot of room to grow. They continue to set record revenues each quarter and expand their offerings and grow their repeat business. Again, I’m not saying a P/E of 33+ is cheap now but I think in the long-term this price will be cheap. I wouldn’t suggest anyone load up on this stock by any means and would suggest buying in stages over time but I do feel it is a good growth company that offers a unique service in such a way that other companies don’t which is evident in their continued revenue growth and growth in unique product developers and engineers.
I’ll jump in here. First, I hold PRLB and I’m comfortable with my current position, but I’m not looking to add right now.
There are three factors that are holding back PRLB at the moment:
PRLB recently moved into a new manufacturing facility and that is having an impact on gross margins. Additionally, some new products that they’ve been introducing are also impacting margins
They made a considerable investment in their sales and marketing infrastructure over the last year. As the CEO put in on their conference call, they will likely be ‘digesting’ that expense growth this year as their sales and marketing expenses return to their long-term expected % of sales, which should improve margins
European revenue growth has been a bit weak
As I said, I’m holding what I currently have but I’ll wait until I see improvement in the numbers before I add any more because I agree with you that we need to see more from the business. When this stock was priced in the 90s, I don’t think people anticipated organic revenue growth in the low 20s and EPS growth of 11% YOY. Good thing I wasn’t buying then…
Chad and Jason, Thanks to you both for your replies. I agree that it a good company (as I stated in my first comment on this thread), but I’d sure like to see better numbers before buying. As Jason says, 11% YOY growth of earnings isn’t exciting.