The 3D printing industry is well-positioned for long-term growth due to cost-effectiveness, ability to bolster supply chains, and sustainability benefits. Increasing demand for customized products, especially in sectors like healthcare and aerospace, as well as government investments in research and development, is further expected to fuel the industry’s growth.
Considering these factors, it could be wise to buy fundamentally strong 3D printing tech stocks Materialise NV (MTLS), Stratasys Ltd. (SSYS), and Proto Labs, Inc. (PRLB). These stocks are Buy-rated in our proprietary rating system, POWR Ratings.
Before diving deeper into their fundamentals, let’s discuss why the 3D printing industry is well-positioned for growth.
The 3D printing industry is evolving with a diverse array of materials and applications, continuously expanding into various sectors. After making its mark as a prototyping technology, it is slowly making its mark as a production technology. However, there is still a long way to go for the 3D printing industry to manufacture on a large scale.
3D printing is being increasingly used to create one-offs or manufacture in small batches. The 3D printing technology is gaining application across various industries at a rapid pace due to major technological advancements that have enhanced the capabilities and affordability of 3D printers.
Due to its wide range of applications, 3D printing has entered sectors like automotive, aerospace, healthcare, consumer products, defense, etc. 3D printing enables customization and on-demand production. It also helps in reducing wastage.
In 2022, the global 3D printing market size was $16.75 billion, and it is projected to reach $34.80 billion by 2030, growing at a CAGR of 23.3%.
Considering these conducive trends, let’s analyze the fundamental aspects of the three Technology - 3D Printing picks, beginning with the third choice.
Stock #3: Materialise NV (MTLS)
Headquartered in Leuven, Belgium, MTLS provides additive manufacturing and, medical software, and 3D printing services in the Americas, Europe and Africa, and the Asia-Pacific. The company operates through three segments: Materialise Software, Materialise Medical, and Materialise Manufacturing.
For the second quarter ended June 30, 2023, MTLS’s revenue increased 11.6% year-over-year to €64.81 million ($69.57 million). Its gross profit rose 15.7% year-over-year to €37.05 million ($39.77 million). In addition, its adjusted EBITDA increased 12.1% year-over-year to €4.76 million ($5.11 million).
For the quarter ending September 30, 2023, MTLS’s revenue is expected to increase 19.5% year-over-year to $69.45 million. Its revenue for fiscal 2024 is expected to increase 238.9% year-over-year to $0.22. Over the past month, the stock has declined 15.1% to close the last trading session at $6.11.
MTLS’s positive outlook is reflected in its POWR Ratings. It has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR ratings assess stocks by 118 different factors, each with its own weighting.
It has an A grade for Value and a B for Sentiment. It is ranked #3 out of 5 stocks in the Technology - 3D Printing industry. To see MTLS’ Growth, Momentum, Stability, and Quality ratings, click here.
Stock #2: Stratasys Ltd. (SSYS)
SSYS provides connected polymer-based 3D printing solutions. It offers a range of 3D printing systems, which includes polyjet printers, Fused Deposition Modeling (FDM) printers, stereolithography printing systems, origin P3 printers, and SAF printers, and various vertical markets.
On June 28, 2023, SSYS announced that several U.S. dental labs, including Posca Brothers Dental Laboratory, Artisan Dental Laboratory, and Express Dental Laboratory, have adopted their TrueDent 3D printed dentures solution. It offers permanent, natural-looking gums and a variety of tooth shades, including incisal translucency in one continuous print.
On April 5, 2023, SSYS announced the completion of its acquisition of Covestro AG's additive manufacturing materials business. This acquisition includes R&D facilities, global development and sales teams, additive manufacturing materials, and an extensive IP portfolio enhancing SSYS’ capabilities in various technology categories. The acquired materials will be available under the Somos and Addigy brands.
Dr. Yoav Zeif, CEO at SSYS, said, “With this acquisition, we’re not just expanding our materials portfolio for our broad array of 3D printing technologies – we’re also paving the way for more new innovations.”
“Additionally, our growing team of in-house materials experts will be in a stronger position to collaborate with our materials ecosystem partners. Together, we’ll be able to address more applications faster, pushing the boundaries of what’s possible in additive manufacturing,” he added.
SSYS’s net sales for the fiscal second quarter that ended June 30, 2023, came in at $159.75 million. Its non-GAAP gross profit came in at $77.51 million. Its non-GAAP operating income increased 158.9% year-over-year to $5.01 million. The company’s non-GAAP net income rose 115.6% year-over-year to $2.53 million. Also, its non-GAAP income per share rose 100% year-over-year to $0.04.
Analysts expect SSYS’s revenue for the quarter ending September 30, 2023, to increase 0.2% year-over-year to $162.46 million. Its EPS for the quarter ending December 31, 2023, is expected to increase 38.1% year-over-year to $0.10. It surpassed the consensus EPS estimates in each of the trailing four quarters. The stock has gained 11.6% year-to-date to close the last trading session at $13.23.
SSYS’s POWR Ratings reflect solid prospects. It has an overall rating of B, which translates to a Buy in our proprietary rating system.
It is ranked #2 in the same industry. It has a B grade for Growth and Momentum. Click here to see SSYS’ Value, Stability, Sentiment, and Quality ratings.
Stock #1: Proto Labs, Inc. (PRLB)
PRLB is an e-commerce digital manufacturer of custom prototypes and on-demand production parts worldwide. The company offers injection moulding, computer numerical control machining, three-dimensional (3D) printing, and sheet metal fabrication products.
On July 17, 2023, PRLB announced the expansion of its CNC machining capabilities to offer accelerated anodizing and chromate plating on aluminum components, enabling custom-machined parts with plating in as fast as four days. Anodizing and plating help to prevent corrosion, strengthen parts, and enhance their cosmetic appearance.
Rob Bodor, President and CEO at PRLB, said, “We’ve promised our customers more capabilities across all our service lines this year, and our machining service is leading the way. Through our unique manufacturing model that pairs a network of global manufacturers with our digital factories, we can comprehensively serve the prototyping and production needs of our customers.”
PRLB’s total revenue for the second quarter that ended June 30, 2023, came in at $122.27 million. Its non-GAAP gross profit came in at $53.93 million. The company’s non-GAAP income from operations came in at $10.87 million.
Its non-GAAP net income came in at $8.67 million. Its non-GAAP net income per share came in at $0.33. Also, its adjusted EBITDA came in at $19.23 million.
Street expects PRLB’s revenue for the quarter ending September 30, 2023, to increase 0.7% year-over-year to $122.61 million. Its EPS for fiscal 2024 is expected to increase 6.2% year-over-year to $1.24. It surpassed the Street EPS estimates in each of the trailing four quarters. Over the past nine months, the stock has gained 11.5% to close the last trading session at $27.81.
It’s no surprise that PRLB has an overall rating of B, which translates to a Buy in our proprietary rating system.
It has a B grade for Value, Momentum, and Quality. Within the Technology – 3D Printing industry, it is ranked first. In total, we rate PRLB on eight different levels. Beyond what we stated above, we also have given PRLB grades for Growth, Stability, and Sentiment. Get all the PRLB ratings here.
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SSYS shares were trading at $12.65 per share on Tuesday afternoon, down $0.58 (-4.38%). Year-to-date, SSYS has gained 6.66%, versus a 17.75% rise in the benchmark S&P 500 index during the same period.
About the Author: Abhishek Bhuyan
Abhishek embarked on his professional journey as a financial journalist due to his keen interest in discerning the fundamental factors that influence the future performance of financial instruments.
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