Definitely getting to an interesting time for Sigma, and not just on the closing up of evaluation programs. It does seem that the industry is now learning a lot more about AM and how it is going to work. It has become obvious that optical really only gets you so far. Not just because John Rice says it does, but because that is the scientific reality. It was interesting hearing John Rice discussing how Sigma and GE effectively followed different paths – one optical and one thermal. It makes sense now to hear that explanation after years of wondering what happened. Kudos to Sigma for sticking to their guns. They hailed from some of the best physicists on the planet who had evolved this idea at one of, if not THE, most pre-eminent physics laboratories on the planet. It makes absolute sense that physics would win the day. Optical may work (to a degree) but it is as John said “muscling your way to a solution” and is thus not efficient, not particularly accurate, slow and expensive when packaged with all the scanning tools.
Sigma has stuck by their physics and now all the initial hubris, surface ‘solutions’ and internal attempts at solving the as you build quality issues are being laid bare. The truth is staring the industry in the face. Those solutions only get you so far, and that far is not good enough for the high end, and nor should it be. If you can’t understand when a build is going wrong, predicting and changing real time, if you can’t verify the quality of every build on every inconsistent machine as it is happening then you are simply inefficient. If you are paying more to do worse then there is room for improvement, and importantly there is a door for competition.
For those who are saying if it is so obvious why has no one bought it, I say again that 19 of the top names in the industry have to this point ‘bought into it’, and spent time and energy evaluating and strategizing how to use it. No negative news from these evaluations. 3 OEM’s evaluating sends a strong message that either their tech is simply not competitive, or that Sigma really has a solution, or both. The fact is these evaluations take time, longer than many know, think about or understand, but they are progressing.
As John mentioned there is a major dislocation between the daily PPS movements in this Bermuda triangle of behind the scenes progress and industry change. That does not mean that dislocation won’t reverse suddenly and consistently, far from it. It won’t take much for this stock to form a solid base much higher than present levels. Whilst Sigma’s golden future lies in the years ahead rather than the months ahead the fact is that the first order or two will lay the balance sheet foundation the PPS needs to remain stable. Once the companies SaaS strategy kicks in there will be a drip feed of revenue coming in regularly complimented by bulk orders here and there. This covers the costs, the marketing and allows the company to really build Sigma into a market pivot. To this point R+D, evaluations and the like have all been a major burden on the bottom line and understandably so, but take that burden off (both due to drip feeding revenue and lower R+D costs) then and then a $14m market cap suddenly becomes obviously low with the potential of the tech, patents, industry growth and data accrual that is apparent.
If thermal truly is the way, the logical physical end game, then Sigma and its patent portfolio which it built whilst everyone was looking the other way (optical) could suddenly come into play in dramatic fashion. Be it simple contract revenue or as the only piece in an industry strategic bidding war.
At this point daily PPS can do what it likes, the near to medium term future is looking very bright indeed from many different angles.
