Lake Street Remains Bullish on Velo3D, Inc. (VELO) Post Q1 Results

Why It Matters

The strong top‑line growth and upgraded target signal that Velo3D’s metal additive‑manufacturing platform is gaining traction, potentially accelerating adoption across high‑value industries and boosting investor confidence in the sector.

Key Takeaways

• Lake Street lifts VELO price target to $20, maintains Buy rating.
• Q1 revenue hits $13.8M, up 48% YoY, gross margin 17.2%.
• 3D printer and parts sales surge 60% on higher ASP and volume.
• Company projects $60‑70M revenue 2026 and EBITDA positivity H2.

Pulse Analysis

Velo3D’s Q1 earnings underscore a rapid scaling phase for its metal laser‑sintering printers, a segment that has historically lagged behind polymer‑based 3D printing. The company’s 48% revenue jump and 60% surge in printer‑related sales reflect not only higher average selling prices but also an expanding installed base that is attracting repeat‑part services (RPS). Analysts see the price‑target lift to $20 as a market‑wide endorsement of Velo3D’s differentiated technology stack, which promises tighter tolerances and reduced post‑processing compared with legacy systems.

Demand for metal additive manufacturing is being driven by aerospace, defense, and automotive OEMs seeking to shorten supply chains and localize production. Onshoring trends, amplified by recent tariff policies, encourage manufacturers to adopt in‑house 3D printing to replace costly tooling and inventory. Velo3D’s Sapphire and Sapphire XC printers, coupled with its Flow software, position the firm to capture a share of this $15‑$20 billion market, especially as customers prioritize high‑strength alloys and rapid prototyping capabilities. The company’s ability to command higher ASPs suggests that customers value the performance edge and are willing to invest in premium equipment.

Looking ahead, Velo3D’s guidance of $60‑$70 million in 2026 revenue and a pivot to EBITDA positivity in the second half signal a clear path to profitability. However, the firm must navigate intense competition from larger players like EOS and Desktop Metal, which benefit from deeper pockets and broader service networks. Scaling production while maintaining its 17% gross margin will be critical. If Velo3D can sustain its sales momentum and expand its service ecosystem, it could become a bellwether for the broader metal‑printing industry, offering investors a compelling growth narrative amid a shifting manufacturing landscape.