Being an early investor in an up-and-coming industry always comes with its fair share of risk, but you will never be able to find the “next big thing” without taking a few chances. For example, 3D printing stocks were dubbed a huge opportunity back in 2013, but early investors in the industry have had to endure years of market underperformance. Their patience might finally be rewarded in 2021, as we are seeing renewed interest in 3D printing stocks to start the year.
What has changed since these companies originally hit the scene? Well, for starters, the technology behind 3D printing has improved by leaps and bounds in terms of cost-effectiveness and efficiency. This could be a sign that the 3D printing industry is on its way towards widespread adoption. It’s estimated that the worldwide market for 3D printing products and services will exceed $40 billion by the year 2024, which means there will certainly be some companies that end up becoming long-term winners for investors. Here are a few 3D printing stocks that could be worth adding if you are interested in the potential of this burgeoning industry.
3D Systems
One of the biggest advantages of 3D printing is that you can print almost anything, which has huge implications for the manufacturing processes across many industries. A big plus is that companies can use 3D printing to create and manufacture customized products without having to invest in expensive tooling for mass production. If you’re interested in a company that is a leading provider of 3D content-to-print solutions, 3D Systems (NYSE:DDD) is a nice option. This company offers products like 3D printers and print materials along with on-demand custom parts services. It even sells scanners that are used in medical and mechanical X-ray film digital archiving.
3D Systems recently surprised investors with a better-than-expected preliminary fourth-quarter revenue outlook which sent the stock soaring. Analysts were expecting fewer than $140 million in sales, while the company announced that it anticipates revenue between $170 and $176 million in Q4. When you consider all of the different businesses that can use this company’s solutions such as companies in the automotive, aerospace, and healthcare industries, it’s easy to recognize why it’s a top pick in the 3D printing space.
Desktop Metal
Next up is a company involved in additive manufacturing technologies that help to bring 3D printing into manufacturing supply chains. One of the big barriers to the widespread adoption of 3D printing is the challenges that manufacturers face to apply the technology to large-scale production. Desktop Metal (NYSE:DM) has the fastest 3D printing platform that can print up to 100x the speed of legacy technology, so it’s easy to recognize the potential here. The company went public last August after a SPAC merger with Trine Acquisition Corp and is off to a good start in 2021. The stock is up over 48% year-to-date alone and is arguably one of the best companies in the 3D printing space to explore.
It’s always nice to see a company making acquisitions that can strengthen its market position, and Desktop Metals announced this week that it is acquiring another 3D printing company called EnvisionTEC for $300 million. EnvisionTEC has technology that can print more than 190 materials while Desktop Metal has the resources to scale it. The company also recently announced that Ford Motors CTO is joining its board of directors and that it has received $65 million in financing led by Ford (NYSE:F). With this company’s innovative metal 3D printing system and strong strategic partnerships, Desktop Metals is a bright spot in the 3D printing sector.
Stratasys
The final 3D printing stock that investors should be watching is Stratasys (NASDAQ:SSYS), a company that provides additive manufacturing solutions including affordable desktop 3D printers and large production systems for direct digital manufacturing. The founder of Stratasys invented one of the first 3D printing technologies over 30 years ago and the company has steadily innovated since then. Today, Stratasys has unique 3D printing technologies like FDM and PolyJet that help to set it apart in a competitive industry.
While the company’s revenue took a hit in 2020, things should improve for Stratasys as capital spending improves this year. Many of the company’s customers were impacted adversely by the pandemic, which means that revenues could be on the upswing as the economy recovers. It’s worth mentioning that Stratasys has a stronger financial position than one of its big competitors, 3D Systems. With a $308 million net cash position at the end of September and no debt, it’s one of the more stable companies in the industry from a financial standpoint. Stratasys has done business with companies like Volvo (OTC:VLVLY), Ford, Lockheed Martin (NYSE:LMT), and Honda (NYSE:HMC) and is worth watching in 2021.