Supply chain issues have given the 3D printing industry a major opportunity.
3D printing is a promising technology platform. Many have long dismissed it as a mere hobby, a niche for a few people with too much time on their hands. In recent years, however, 3D printing has rapidly gained commercial adoption. Now industries including manufacturing, education and health care are starting to incorporate the unique versatility of 3D printing into their workflows. Furthermore, the pandemic disrupted supply chains, elevating the utility of on-site manufacturing options for key parts. As commercial adoption of 3D printing grows, the potential marketplace for stocks in this industry grows with it. Investors may have written it off, given that the flagship 3D Printing ETF (ticker: PRNT) has dramatically underperformed the S&P 500 and tech stocks in recent years. However, 3D printing stocks have taken off in recent months, and this looks like a potential inflection point where the technology finally reaches the mainstream. That'd be great news for these six 3D printing stocks to buy.
3D Systems Corp. (ticker: DDD)
3D Systems is one of the pioneers in the industry. Chuck Hull, a co-founder of the company, was one of the inventors of the stereolithography 3D printer and earned a patent for it in 1986. 3D Systems formed shortly thereafter and has been publicly traded for more than 30 years. For much of that span, the stock failed to produce returns. However, in 2012, 3D printing caught the public's fancy and shares increased tenfold. Shares faded after that, though things have picked up again over the past year. 3D Systems has built a large business and generates about $600 million per year in revenues. Alas, it has not been consistently profitable, and revenues are down over the past few years. 3D Systems has a well-known brand and a large existing customer base, but it's still looking for a big breakthrough that will allow it to take the next step in its corporate evolution.
The ExOne Co. (XONE)
ExOne is one of the most controversial 3D printing stocks. Short sellers have hounded the firm, and nearly 9% of the float is sold short. Trading volatility has been elevated, as well: The stock surged from $10 to $70 over the past 12 months but has fallen back to $24. The reason for ExOne's uncertainty is clear: It's a small firm that designs and manufactures 3D printing machines. Over the past few years, it has generated about $50 million in annual revenue while running sizable net losses. Bullish analysts believe ExOne is at a turning point; their consensus outlook is that revenues will double by year-end 2023 while the company's operating loss becomes more manageable. Bears are far more skeptical. One thing is for certain: In a market like this, ExOne could be a target for a short squeeze given that it has prominent backers such as Ark Invest and a trendy technology platform.
Stratasys Ltd. (SSYS)
Stratasys is another firm directly involved in the design and manufacture of 3D printing equipment. The main appeal to Stratasys is that it has a similar revenue base to 3D Systems but a much smaller market cap. 3D Systems is valued at more than $3 billion, whereas Stratasys is going for just $1.4 billion. Like 3D Systems, Stratasys has seen its revenue slump in recent years as the initial excitement around the technology significantly outpaced real-world applications. However, with analysts turning bullish on the industry once again, Stratasys could be set for a comeback. Analysts see the firm's revenue moving back into a steady uptrend while the company returns to profitability in 2022. If the golden age of 3D printing is about to kick off, Stratasys should be one of the winners.
Straumann Holding (SAUHY)
Straumann is a European firm and one of the leaders in turning the potential of 3D printing into real-world results. Straumann is a long-running supplier to the dental industry. It provides goods such as implants, biomaterials, orthodontic equipment and dental software to clients. Dentistry is rapidly taking up digital services for a variety of its most common treatments. Straumann specifically has built a 3D printing system that lets dentists simply scan a patient's mouth. Then the 3D printer can work out exactly the implant needed and produce it right in the office. This greatly aids a dentist's workflow, allowing them to treat more patients and offer more personalized service. Straumann is a large company, so 3D printing is far from the only driver of the firm's commercial success. Regardless, it's one of the innovators in transforming 3D printing from the realms of the theoretical to the practical.
AutoDesk Inc. (ADSK)
AutoDesk is a software-as-a-service company focused on graphic design. It offers a picks-and-shovels way to play the 3D printing industry. After all, manufacturing firms need software to design and coordinate their 3D printing operations. AutoDesk has several offerings in this field. Fusion360 is cloud-based computer-aided design software for product design. AutoDesk's NetFabb is a software package for additive manufacturing and design. And the list goes on. AutoDesk isn't a pure play on 3D printing, as its software is also used for many other purposes. However, unlike most 3D printing companies, AutoDesk is already strongly profitable and has a huge stable client base. This makes AutoDesk one of the safest ways to invest in 3D printing.
Ansys Inc. (ANSS)
Like AutoDesk, Ansys is far from a pure play on 3D printing. Ansys is a wide-reaching software firm focusing on solutions for engineering and simulation. Ansys generates nearly $2 billion per year in revenue and is reasonably profitable; it currently trades at a price-to-earnings ratio around 70. The company already dominates many niche applications that it serves and has a large and sticky customer base. Within that software empire, the company offers 3D printing simulation software to help firms with their additive manufacturing processes. The software covers three stages of the printing process: design, prep and printing. While Ansys is large enough that its 3D printing business won't make or break the firm, it could give the company a big tailwind as the industry goes more mainstream.
6 of the best 3D printing stocks to buy now:
-- 3D Systems Corp. (DDD)
-- The ExOne Co. (XONE)
-- Stratasys Ltd. (SSYS)
-- Straumann Holding (SAUHY)
-- AutoDesk Inc. (ADSK)
-- Ansys Inc. (ANSS)
Ian Bezek is a contributor for U.S. News & World Report, where he covers financial markets, stocks, and business. He's also a contributor at Seeking Alpha and InvestorPlace.
He holds an Economics degree from Colorado State University '10 and was the opinion editor of that university's student newspaper in his senior year. He then worked as an analyst for Kerrisdale Capital, a New York City-based activist hedge fund, for several years, focusing on international stocks. Since then he learned Spanish and has lived in Mexico and Colombia to pursue investments and business opportunities abroad.
Ian has appeared on various TV programs and podcasts such as Cheddar, and his work has been cited in leading publications including Reuters and Bloomberg. You can reach Ian on Twitter at @irbezek or at email@example.com.