The 3D Printing Landscape
3D printing – or additive manufacturing, in the jargon – has matured from a hobby for hardcore computer design experts to become a growing segment of industry and manufacturing. The industry has witnessed vicissitudes in recent years, with the COVID pandemic boosting demand while high inflation and interest rates in 2021 and 2022 put a damper on the business.
Potential for Pent-Up Demand
According to Cantor Fitzgerald analyst Troy Jensen, the manufacturing sector is poised to embark on an upswing as the economy improves, driven by a pent-up reserve of demand awaiting orders. This anticipated resurgence presents an investment opportunity as economic conditions stabilize or improve, spurred by a decline in interest rates and a more favorable economic environment. If negative impacts from geopolitical and economic factors subside, companies are expected to reconsider and resume their interest in additive manufacturing for reshoring or near-shoring strategies.
Stocks Poised for Gains
Jensen identifies 3D printing stocks that stand to benefit from the anticipated surge in demand, presenting an opportunity for investors. Let’s delve into the details of these companies.
3D Systems Corporation (DDD)
3D Systems, a South Carolina-based firm established in the 1980s, offers a comprehensive range of solutions in the 3D printing industry, including 3D printers, printing materials, and requisite software. Despite reporting net-loss quarters in recent years, the company signaled a turnaround with a net profit in its last quarterly report for 3Q23. This improvement was driven by total revenue of $123.8 million, highlighting the company’s resilience.
Cantor analyst Jensen lauds 3D Systems for its strong product portfolio, strategic repositioning, and potential for sustained profitability under the leadership of CEO Jeff Graves. Jensen’s sentiment is echoed in his Overweight (Buy) rating and a price target of $8.50, indicating a one-year upside of 54.5%.
Stratasys (SSYS)
Stratasys, another veteran player in the 3D printing arena, stands to benefit from industry pent-up demand and a consolidation wave, according to Jensen. The company, headquartered in Minnesota and also established in the 1980s, offers a full suite of 3D printing solutions, materials, and on-demand manufacturing. Its last reported period saw the company beat revenue forecasts, indicating its resilience and adaptability to market conditions.
Jensen’s Overweight rating and a price target of $24 for Stratasys reflect a robust one-year upside potential of 80%, underpinned by new product cycles and a favorable growth environment.
Analyst Consensus and Outlook
While Jensen’s analysis is predominantly bullish on both 3D Systems and Stratasys, the broader analyst view reflects a Moderate Buy consensus. With the potential for substantial upside, these 3D printing stocks present intriguing opportunities for investors.
In Conclusion
The anticipated resurgence in the 3D printing industry, driven by pent-up demand and favorable economic conditions, presents an opportune moment for investors to consider 3D Systems and Stratasys. With innovative technologies, strategic positioning, and resilient financial performance, these companies are poised to capitalize on the potential upsurge in the additive manufacturing sector.
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
