The Fast Radius Inc (NASDAQ: FSRD) share price rose 37.23% in yesterday's session and is up another 35% in pre-market trading today. On 30 June 2022, the trading volume for Fast Radius (FSRD) was 3x higher than the prior 30-day average, so are people buying the dip?
What Is Fast Radius?
Fast Radius Inc (NASDAQ: FSRD) is a cloud manufacturing and digital supply chain specialist. It helps manufacturing companies design and choose their parts' composition to meet specifications. It also helps specialist industry teams improve their operations.
The company has built a quality management system and production and supply chain infrastructure to help clients efficiently bring products to market. It operates at a high quality and at scale.
Fast Radius offers a selection of industrial-grade materials for its CNC machining, 3D printing, cast urethane, and injection molding processes. It helps customers determine which material best suits their needs.
Aerospace Case Study
For instance, Fast Radius helped aerospace company Satair make faster flight repair possible.
Fast Radius has an application engineering team working directly with the client to generate a final design. Then the company's digital manufacturing team ensures the design matches the reality of how it's to be built. Digital manufacturing engineers then assemble the parts, which are carefully inspected and sent to the client for final approval.
The Fast Radius virtual warehouse allows companies to store parts digitally in the cloud. The client can then order them and have Fast Radius produce them on demand when they're needed around the world. The system is simple to use and tracks the process from request to delivery.
This partnership with Satair shows the scale and efficiency that are possible when companies embrace these new tools.
TacMed Partners with Fast Radius
Fast Radius is working with TacMed, a leading supplier of emergency medical equipment, to produce a key component used in TacMed's SOF® Tourniquet.
The SOF Tourniquet is a pre-hospital emergency medical device used by military and front-line personnel around the world to stop bleeding from potentially life-threatening limb wounds.
TacMed is leveraging Fast Radius' Cloud Manufacturing Platform™ to rapidly scale the production of a critical Tourniquet part. This means TacMed can meet increasing demand for the product in response to the conflict in Ukraine, overcoming bottlenecks within the global supply chain.
How Does Fast Radius Make Money?
Fast Radius makes money from the product sales of manufactured parts.
Fast Radius received $7m worth of new orders in Q1, up 36% Y/Y, according to its quarterly report.
Lou Rassey, Co-Founder and CEO of Fast Radius, said:
In the first quarter, we grew revenue by 65% compared to the year ago period, driven by increased demand from new and existing customers.
Accordingly, we’re pleased to raise our full year revenue outlook to a range of $29 million to $34 million, which would represent an increase of 45% to 70% year over year.
Fast Radius secured additional equity financing in Q1 to provide incremental flexibility in the future.
Industries Fast Radius works with include:
Aerospace
Automotive
Consumer Goods
Medical Devices
Robotics
FSRD Stock Financials
FSRD stock has a price-to-earnings ratio (P/E) of 4.6, compared to an industry average of 0.5. Its price-to-book value (P/BV) is 1.4, below the industry average of 1.6. It doesn't offer a shareholder dividend.
FSRD Growth Potential
For the full year 2022, Fast Radius raised its revenue guidance to be within $29m to $34m. Adjusted EBITDA loss is expected to be within the range of $72m to $65m.
The company is focused on building momentum from its cloud-based manufacturing platform.
We are continuing to enhance our software and solutions, build out our customer base and user community, and grow our supplier network to expand our on-demand marketplace offering. As we focus on these discrete areas, we anticipate helping more companies bring products to market more flexibly, sustainably, and cost effectively.
Fast Radius believes its recent performance clearly demonstrates that customers need new, more flexible and more sustainable digital manufacturing and supply chain solutions and is well-positioned to meet that demand.
FSRD Stock Risks
FSRD is an early-stage company with a history of losses.
The company has a history of losses since its incorporation in 2017 and has funded its cash flow deficits primarily through capital stock and debt issuance.
As of 31 December 2021, Fast Radius had an accumulated deficit of approximately $123.3m, including 2021 net losses of around $67.9m.
The company expects to continue to incur operating losses and negative cash flow while investing in R&D, sales, and marketing.
With inflation rising and the stock markets enduring volatility and bearish sentiment toward growth stocks, companies like FSRD may continue to suffer.
Should You Invest in Fast Radius?
Fast Radius went public on the NASDAQ through a SPAC deal in February. Many shareholders took the opportunity to cash out, causing the share price to fall.
And FSRD stock fell 93.64% in the first six months of 2022.
This is clearly a risky investment, but the company has helped some impressive clients, including Aptiv (NYSE: APTV) (on behalf of Ford), Rawlings Sporting Goods, and Satair, a subsidiary of Airbus (EPA: AIR). It has an ambitious growth path ahead, but if it can continue attracting clients with scalable projects, the opportunities and revenues may multiply.
There is the potential for the share price to be diluted through share placings if the company needs to raise cash, so whether you should invest in Fast Radius depends on your appetite for risk.