AL3 share price performs strongly after Christmas
Our 3D printing Investment AML3D (ASX: AL3) had a strong period over the holiday period from a share price perspective…
AL3 was trading at ~16c per share on the 23rd of December.
In early trading on 10 January 2025, it is trading at ~19.5c per share.
We think the best part about AL3’s move is that there were some solid volumes on the stock, which we hope means the move might be real and not just short term volatility.
It’s also a really strong move considering AL3 just raised $30M at 19c which we thought would create a lot more selling pressure in the medium term given the size of the raise.
The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.
AL3 had no big news over the holiday period, but on the 6th of January we did get an announcement about AL3 supplying parts to the US nuclear submarine program (part of the AUKUS partnership).
The part was a prototype copper-nickel tailpiece worth ~US$156K.
That sale is more than one part though… it was a proof of value.
The AUKUS deal is a trilateral security pact between Australia, the United Kingdom, and the United States, which includes significant investments in military cooperation and advanced defense technologies like nuclear-powered submarines.
The deal has been plagued with delays after delays and 3D printing - the exact service that AL3 offers - is seen as a potential solution.
The program is expected to cost up to $368BN and we think that AL3 can capture some of this value if it helps to speed things up.
The part was manufactured in less than 5 weeks, compared to the 17-month lead time needed if this part was purchased through traditional means through a 3rd party manufacturer.
This efficiency unlock is the major takeaway for us from Monday’s announcement.
And we think that parties to the AUKUS deal (and their $368BN cheque book) will start to take notice).
Read our Quick Take on the news below:
AML3D to make tailpiece components for the US nuclear submarine program
How does this affect our AL3 Investment Memo?
This news relates to the following objectives in our AL3 Investment Memo:
Objective #1: Hit $12M in revenue
According to the March quarterly AL3 will hit ~$7M revenue for FY24
We think that if they can back that up with beating $12M revenue in FY25 it would be a huge result.
Source: 27th June 2024 AL3 Investment Memo
Objective #4: More sales from manufacturing and prototype deals
In addition to the ARCEMY product, AL3 sells specific 3D printed parts to various organisations.
These sales contracts are generally smaller and proof of concept that will hopefully lead to repeat business.
Product testing and certifications expand the library of products that AL3 can sell in this way.
Source: 27th June 2024 AL3 Investment Memo
What’s next for AL3?
More sales out of the US
Now for AL3 it’s all about the US scale up.
AL3 has previously mentioned it will be doubling the capacity of its US facility AND is only days away from having the facility ready for operations.
We are hoping that the US facility coming online brings with it big new contracts to fulfil (and hopefully big $ revenue amounts attached to those deals).
We are also hoping to see some of those lucrative ITAR contracts that AL3 have mentioned get converted into sales.
UK/European expansion on the cards?
AL3 has also previously flagged the opportunity of expanding into the UK.
The majority of AL3’s sales are out of the US, so expansion into a new market is completely new upside from a revenues perspective.
We are looking forward to newsflow from the company’s push into the UK/European market.
