These 3D printing stocks are poised for a breakout as industries see the tech’s value in reducing supply-chain bottlenecks
3D printing technology has been around for over 30 years, but it’s still yet to go mainstream. Despite its disruptive potential and optimistic growth projections, it hasn’t caught on with daily life. Nevertheless, we have seen the massive potential of additive manufacturing during the pandemic and its ability to streamline supply chains.
Moreover, 3D printing will cease becoming a niche technology with data analytics, the Internet of Things, AI and other phenomena. Hence, early investing in 3D printing stocks can offer multi-bagger returns down the line.
Industrial 3D printing has taken off in the past few years in a big way. The technology has moved quickly from tooling, prototyping, and trinkets. Additive manufacturing enables customers to develop safe and durable products in sizeable quantities. According to Grandview Research, the 3D printing market will grow at a staggering 21% CAGR from 2021 to 2028.
Having said that, let’s look at three of the needle-movers in the 3D printing space that are poised for big gains in the future.
- Stratasys (NASDAQ:SSYS)
- Desktop Metal (NYSE:DM)
- 3D Systems (NYSE:DDD)
All three are among the 61 stocks in The 3D Printing ETF (BATS:PRNT) portfolio, with both DM and SSYS stock among the top 10 holdings. (see price chart below) That exchange-traded fund is one of ARK Invest’s index-tracking offerings, though the firm is better known for its actively managed products. It has an expense ratio of 0.66%.
3D Printing Stocks to Buy: Stratasys (SSYS)
Stratasys is one of the top 3D manufacturers for parts development and rapid prototyping. SSYS stock was all hype for the past several years, offering little value for its investors. However, looking at the step changes in its sector, the firm will enter its stride and grow its business aggressively.
The quality of 3D printing is improving, and industries are seeing its value in reducing supply-chain bottlenecks.
Coupled with other technologies, the industry is set to boom, and Stratasys has set itself up from robust growth ahead. It has acquired several companies in expanding its competencies, such as Xaar 3D, which can make it an industrial 3D printing juggernaut.
Moreover, its double-digit top-line expansion is already showing the effects of the new growth cycle. However, the market is underplaying the long-term potential for SSYS stock, which presents an excellent buying opportunity.
Desktop Metal (DM)
Desktop Metal is an additive manufacturing specialist, offering its customers a wide range of solutions and services.
DM stock has been on a negative run since listing on the New York Stock Exchange in December 2020. However, the investor skepticism was perhaps justified, considering how its share price got way ahead of its expectations.
Moreover, the frequent delays in its highly touted Production System P-50 were partly to blame for its stock’s weakness. Nevertheless, the first P-50 was shipped to industrial giant Stanley Black & Decker (NYSE:SWK) in February, and sales should start picking up in the not-so-distant future.
Its business is on fire, posting $112.4 million in revenue last year, representing 582.5% growth from 2020. Gross margins remain impressive at 16%, suggesting it could become profitable in a few years. DM stock trades dirt cheap based on its spectacular fundamentals and future estimates.
3D Printing Stocks to Buy: 3D Systems (DDD)
3D Systems is a South Carolina-based 3D printing company that has made great strides in healthcare and industrial markets.
It has steadily expanded into attractive sectors in the past couple of years and improved its industry-specific abilities. Hence, it was busy on the mergers and acquisitions front last year, cementing its market share in bioprinting, regenerative medicine, and other related niches.
Its 2021 operating results were impressive and pointed to an exciting time ahead. Its sales grew 31.8% from the prior-year period after adjusting for divestitures. Moreover, its net income increased to $322.1 million compared to a loss of $149.6 million last year.
Additionally, it expects its revenues to surpass analyst estimates on both lines comfortably this year. DDD stock is currently trading at a price-to-sales multiple of 4.19 times, and near the low end of its 52-week range.
This article originally appeared at InvestorPlace.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.