Strong Revenue and Income Growth Make Proto Labs Stock the ‘Real Deal’

Proto Labs (PRLB) demonstrates strong technical momentum with shares trading at a new 5-year high. 

The stock has gained more than 90% over the past 52 weeks. 

Analyst sentiment is mixed. Barchart rates it a “Strong Buy” while CFRA rates it a “Sell.” 

Despite its elevated valuation, consistent price appreciation and growth forecasts support a constructive outlook for PRLB’s near-term performance.

Today’s Featured Stock

Valued at $2.3 billion, Proto Labs (PRLB) is an online and technology-enabled quick-turn manufacturer of custom parts for prototyping and short-run production. It produces CNC-machined and injection-molded plastic parts. Proto Labs targets its services to product developers who use three-dimensional computer-aided design to develop products across a diverse range of end-markets. 

What I’m Watching

I found today’s Chart of the Day by using Barchart’s powerful screening functions to sort for stocks with the highest technical buy signals and superior current momentum. I then used Barchart’s Flipcharts feature to review the charts for consistent price appreciation. PRLB checks those boxes. The Trend Seeker issued a new “Buy” signal on Sept. 17. The stock has gained 11.47% since that signal.

Barchart’s Technical Indicators for Proto Labs

Editor’s Note: The technical indicators below are updated live during the session every 20 minutes and can therefore change each day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report. These technical indicators form the Barchart Opinion on a particular stock.

Proto Labs hit a 5-year high of $98.32 on September 29.

• Proto Labs has a Weighted Alpha of 92.43.
• PRLB has a 100% “Buy” opinion from Barchart.
• The stock has gained 94.02% over the past 52 weeks.
• Proto Labs has its Trend Seeker “Buy” signal intact.
• The stock recently traded at $96.59 with a 50-day moving average of $83.83.
• PRLB had 13 highs and gained 21.73% in the last month.
• 60-month beta of 1.42.
• Relative Strength Index (RSI) is at 71.59.
• There’s a technical support level around $94.21.

Don’t Forget the Fundamentals

• $2.3 billion market capitalization.
• 72.31x trailing price-earnings ratio.
• Revenue is projected to grow by 9.25% this year and another 7.56% next year.
• Earnings are estimated to increase by 33.37% this year and an additional 7.84% next year.

Analyst and Investor Sentiment on Proto Labs

• The Wall Street analysts followed by Barchart give the stock 4 “Strong Buy,” 1 “Moderate Buy,” and 1 “Hold” rating with price targets from $87 to $110.
• Value Line rates the stock “Above Average” with price targets between $125 and $185.
• Morningstar thinks the stock is 15% overvalued.
• CFRA’s MarketScope rates the stock as “Sell.”
• 16,410 investors are following the stock on Seeking Alpha, which rates it a “Strong Buy.”
• TipRanks’ analysts’ price target is $96.
• Short interest is 2.57% of the float with 3.52 days to cover the float.

The Bottom Line on Proto Labs

Although the stock’s price momentum has made its valuation a little high, analysts and Value Line still like this company. There have been solid increases predicted in revenue and income for at least the next two years. Sounds good to me. 

Additional disclosure: The Barchart Chart of the Day highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile and speculative. Should you decide to add one of these stocks to your investment portfolio, it is highly suggested you follow a predetermined diversification and moving stop loss discipline that is consistent with your personal investment risk tolerance. 

On the date of publication, Jim Van Meerten did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.