Nano Dimension Goes Parabolic – Nano Dimension Ltd ADR (NASDAQ:NNDM)

The Israeli technology scene is full of little gems, and here is one that caught our attention after Monday’s epic rally in which the share price doubled:

You don’t see that very often, and while Nano Dimension (NNDM) is a small company, it does have a market cap of $178M so it’s not ultra tiny. There was a clear catalyst for Monday’s explosion (Yahoo):

Nano Dimension Ltd., a leading additive electronics provider (Nasdaq, TASE: NNDM), today announced it has sold a DragonFly 2020 Pro 3D Printer to a U.S.-based, global top ten, defense company. The sale marks this customer’s second purchase of a Nano Dimension 3D printed electronics system. The first system was installed as part of Nano Dimension’s beta program in 2017. Nano Dimension also announced that its U.S. subsidiary has achieved United States Government Certified Vendor status, having received a Commercial and Government Entity (CAGE) Code from the United States Department of Defense’s Defense Logistics Agency. CAGE codes are used extensively within and by the U.S. federal government.

But what you also see is that we’re still far off from the $5+ range in which the shares traded 9 months ago, it has been all downhill from there until Monday.

3D printed electronics

What do they do? Well as the name suggests, this is a 3D printing company, but their Dragonfly 2020 Pro 3D printer operates in a field where few (if any) other 3D printing companies operate. From the company website:

Nano Dimension’s technologies use advanced nanoparticle inks to enable in-house rapid prototyping of professional, multilayer printed circuit boards (PCBs) and 3D circuitry. By combining advanced inkjet printing, precise 3D printing and nano ink technology, the company’s innovative DragonFly 2020 Pro 3D Printer prints high resolution multilayer PCB prototypes in a matter of hours, reducing design and test cycles, from months or weeks to days.

3D printed electronics, that’s interesting. From their recent investment presentation:

Management argues that they basically have no competition, which would make it even more interesting of course. Here is management (Q1CC, our emphasis):

With no direct competition to our product to-date in the market, that expect to have some 50 billion connected devices, we see a truly open ended potential in Nano Dimension than what is reflected to-date. Accordingly, I remain confident in our ability to further accelerate our execution and substantially improve results…. We are the only 3D printing company that offers technology companies who are building the next generation of products, an in-house solution that helps them reduce the time to prototype these new devices and in many cases to create solutions that cannot be made by any other means of manufacturing. So that is a very unique position.

We looked around for competition, and found a company called Voxel8. However, it doesn’t yet seem at Nano’s height. From

The company’s current model does need to stop to place the electronics, however. While the Nano Dimension can print advanced circuits, Voxel8 prints connections and simple circuits. For example, a drone printed in a single print had to pause so someone could place in the electronics and motors. Then the print finished by encasing the electronics.

That article contains a few more names, but these operate in different niches or are still at an experimental stage.

They have other technology in development:

And that’s not even all. From Reuters:

Israeli 3D printer firm Nano Dimension has successfully lab-tested a 3D bioprinter for stem cells, paving the way for the potential printing of large tissues and organs, the company said on Wednesday. While 3D printers are used already to create stem cells for research, Nano Dimension said the trial, conducted with Israeli biotech firm Accellta Ltd, showed its adapted printer could make large volumes of high resolution cells quickly.

See here for the state of 3D printing of stem cells. This was in 2016 and the plans are becoming a bit more focused. From Duke:

The Israel-based company is looking to enter this new sector after conducting market research into applications of its technology to the field of 3D bio-printing. Nano Dimension has decided to focus primarily on solutions for end stage renal disease (ESRD), which leads to kidney failure. Explaining Nano Dimension’s foray into the emerging market of bio-printing, Amit Dror, the company’s CEO, considers the technology and knowledge of nano-chemistry at Nano Dimension’s disposal can be of great help to the medical sector.

This has been put in a separate subsidiary with separate funding. Their subsidiary Nano Dimension Technologies Ltd. has already applied for a patent. There are more research projects (company PR):

Nano Dimension Ltd., a leader in the field of 3D printed electronics (NASDAQ, TASE: NNDM), announced today that its wholly owned subsidiary, Nano Dimension Technologies Ltd., has received a budget from the Israel Innovation Authority which will be used to finance a project to develop 3D ceramic materials, that can be used in inkjet technology, thus allowing the printing of low density and high thickness objects for space applications. The total approved budget for this project is NIS 585,000 (approximately $165,000), of which the Israel Innovation Authority will finance 30%. The terms of the grant provide that we will pay royalties on future sales up to the full grant amount. This unique project is done in collaboration with Semplastics LLC, a leading supplier of engineered components for a broad range of industries, mainly semi-conductors

But for now, they have their hands more than full with marketing the Dragonfly.


Nano Dimension is already selling fully fledged 3D printers, 10 of them to date. The sales started in Q4 2017 with revenues of $440K, increasing to $$635K in Q1 2018, so it seems the Dragonfly sells for roughly $100K a piece.

And what’s more, the company is actually shifting people from R&D to sales, which indicates that they see most of the development behind them and want to concentrate on sales. Let’s first get a broad picture:

ChartNNDM Revenue (TTM) data by YCharts

The company only started selling their 3D printers last year, but there is considerable progress on that front and management argues this will continue (Q1CC):

We sold more printers in the first quarter than we did in the fourth quarter of 2017 and we expect to increase sequential sales growth every quarter for the remainder of this year… we should be able to move soon enough to the seven digits on revenues.

And the CEO puts his money where his mouth is (Q1CC):

To demonstrate my confidence in the strength of our company and its future growth, I’m committing the entirety of my salary for the next six months to purchasing additional Nano Dimension shares in compliance with all applicable security laws.

How about that for confidence and commitment! And he doubled the money he’s already put in on Monday. From their recent investment presentation:

The company is increasing sales through the following ways:

  • Increasing sales personnel
  • Visitor centers
  • Value-added resellers

Visitor centers are where prospective customers can see the printer in action. They have three – one at the company headquarters in Israel and another two in California, close to the high-tech action, like the new one in Santa Clara.

The company has about 10 resellers, 5 of which in large areas in which they expect to sell 10 printers a year and another 5 in smaller areas in which they expect to sell 5 printers a year on average. They expect to double the number of resellers this year, concentrating on bigger areas.

Mind you, none of these resellers are up to speed (they’re going through extensive training), although one already sold a 3D printer. These resellers are also overseas, like in Singapore and Hong Kong, the latter to address the Chinese market as well.

Investors might also want to realize that the company is likely to make quite a bit of additional revenue with stuff like training, service and selling ink. These inks are really specialist stuff. This isn’t your HP inkjet filler, needless to say, and they produce it themselves.


It is perhaps a little silly to look at margins at this stage (especially operating margins) but this is just to get a feel of the gross margins they are enjoying. We suppose these will rise when sales ramp up.

ChartNNDM Gross Profit Margin (Quarterly) data by YCharts

However, since they make considerable use of third-party value-added resellers, this will lower their margins (Q1CC):

They actually invest hundreds of thousands in terms of investment to acquire a printer, to train the right people. And then they start doing the work and are going through their portfolio. And they also go through their own learning curve on that process.

Of course these resellers are only on board if they earn an attractive margin for themselves. So we’ll keep an eye on how gross margin actually develops throughout the year.

The company further spends:

  • R&D at $2.45M in Q1 (up slightly from $2.41M in Q1 2017).
  • S&M at $786K in Q1 (up from $459K in Q1 2017).
  • G&A at $885K in Q1 (down from $901K in Q1 2017).

Here is the company’s longer-term model:


The company ended with $14.67M in cash at the end of Q1. How long will that last? From Q1CC:

The company’s ongoing expected burn rate through the end of the year not including bill of materials, which directly related to sales is about $1.3 million per month.

This is another reason to keep an eye on gross margins, as an increase there will reduce the cash burn.


The present situation is a bit of a race between cash burn and share count on one side and revenue growth on the other. How is the stock count developing?

ChartNNDM Shares Outstanding data by YCharts

There was a placement this year, as you can see of 6.9M shares at $2 in February this year.


It’s silly to look at valuation at this stage but the market cap at roughly $170M (at the time of writing) is a very substantial multiple of the sales, which have not even reached $1M.


This is undoubtedly an interesting company and they seem to have a very innovative product with a good chance of having others following.

The sales of the Dragonfly are ramping up pretty quickly, and it’s an interesting razor and blade business model, which looks promising, as they seem to have unique capabilities.

It remains to be seen at what stage the company can reach cash flow break-even, given the additional investments in sales and marketing that are required.

The company can last throughout this year on existing cash, but it’s likely that they will have to go back to the markets again. As a result, we’re a little hesitant to wholeheartedly advice purchasing the shares here. Early investors sit on considerable losses.

Nevertheless, we’re quite convinced the company will manage to significantly exceed its market cap of just $170M and change and if they can do that without further big dilutions the shares would be big winners.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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