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Desktop Metal has the Financial Strength Rank of 3. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.
Warning Sign:
Desktop Metal Inc displays poor financial strength. Usually, this is caused by too much debt for the company.
GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors:
1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.Desktop Metal did not have earnings to cover the interest expense. Desktop Metal's debt to revenue ratio for the quarter that ended in Dec. 2023 was 0.69. As of today, Desktop Metal's Altman Z-Score is -5.93.
For the Computer Hardware subindustry, Desktop Metal's Financial Strength, along with its competitors' market caps and Financial Strength data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
For the Hardware industry and Technology sector, Desktop Metal's Financial Strength distribution charts can be found below:
* The bar in red indicates where Desktop Metal's Financial Strength falls into.
GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors
A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.
1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:
Desktop Metal's Interest Expense for the months ended in Dec. 2023 was $-0.6 Mil. Its Operating Income for the months ended in Dec. 2023 was $-64.4 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Dec. 2023 was $136.2 Mil.
Desktop Metal's Interest Coverage for the quarter that ended in Dec. 2023 is
Desktop Metal did not have earnings to cover the interest expense. |
The higher the ratio, the stronger the company's financial strength is.
2. Debt to revenue ratio. The lower, the better.
Desktop Metal's Debt to Revenue Ratio for the quarter that ended in Dec. 2023 is
Debt to Revenue Ratio | = | Total Debt (Q: Dec. 2023 ) | / | Revenue | ||
= | (Short-Term Debt & Capital Lease Obligation | + | Long-Term Debt & Capital Lease Obligation) | / | Revenue | |
= | (7.734 | + | 136.22) | / | 209.384 | |
= | 0.69 |
3. Altman Z-Score.
Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.
The zones of discrimination were as such:
When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.
Desktop Metal has a Z-score of -5.93, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.
Warning Sign:
Altman Z-score of -5.93 is in distress zone. This implies bankruptcy possibility in the next two years.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Desktop Metal (NYSE:DM) Financial Strength Explanation
The maximum rank is 10. Companies with rank 7 or higher will be unlikely to fall into distressed situations. Companies with rank of 3 or less are likely in financial distress.
Desktop Metal has the Financial Strength Rank of 3. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.
Thank you for viewing the detailed overview of Desktop Metal's Financial Strength provided by GuruFocus.com. Please click on the following links to see related term pages.
Farhad Fred Ebrahimi | 10 percent owner | 191 UNIVERSITY BLVD., #246, DENVER CO 80206 |
Scott J Dussault | director | C/O DESKTOP METAL, INC., 63 THIRD AVE, BURLINGTON MA 01803 |
Jason M Cole | officer: CFO & TREASURER | C/O DESKTOP METAL, INC., 63 3RD AVENUE, BURLINGTON MA 01803 |
Ric Fulop | director, officer: Chief Executive Officer | C/O DESKTOP METAL, INC., 63 THIRD AVENUE, BURLINGTON MA 01803 |
Thomas Nogueira | officer: CHIEF OPERATING OFFICER | C/O DESKTOP METAL, INC., 63 3RD AVENUE, BURLINGTON MA 01803 |
Hindery Leo J. Jr. | director, other: See remarks. | C/O HMG, INC., C/O CINE LATINO, INC., 2000 PONCE DE LEON BLVD, SUITE 500, CORAL GABLES FL 33134 |
Michael M. Jafar | officer: CEO, Desktop Health | 17901 VON KARMAN AVENUE, SUITE 150, IRVINE CA 92614 |
James S Eisenstein | director | C/O AMERICAN TOWER CORP, 116 HUNTINGTON AVE, BOSTON MA 02116 |
Jeffrey R Immelt | director | GENERAL ELECTRIC COMPANY, 41 FARNSWORTH STREET, BOSTON MA 02210 |
Siblani Ali El | director, officer: CEO of EnvisionTec US, LLC | 63 THIRD AVENUE, BURLINGTON MA 01803 |
James Haley | officer: CFO & Treasurer | 63 THIRD AVENUE, BURLINGTON MA 01803 |
Arjun Aggarwal | officer: Chief Product Officer | C/O DESKTOP METAL, INC., 63 THIRD AVENUE, BURLINGTON MA 01803 |
Wen Hsuan Hsieh | director | C/O DESKTOP METAL, INC., 63 THIRD AVENUE, BURLINGTON MA 01803 |
Forest Baskett | 10 percent owner | |
Bilal Zuberi | director | C/O DESKTOP METAL, INC., 63 THIRD AVENUE, BURLINGTON MA 01803 |
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