3D printing – also known as additive manufacturing – has been touted for a number of years as being an industry with such disruptive potential as to represent a new industrial revolution. However, it seems that stocks in the leading 3D printing companies have been the victims of a hype cycle, with expectations massively exceeding short term practical realities and hence stock prices forming a bubble that rather spectacularly burst at the beginning of 2014. The leading 3D printing stock over the last few years has been 3D Systems, and their stock price reached a heady 96 at one point, then rapidly falling to as low as 7 early last year. Other top 3D printing stocks such as Stratasys also followed a similar boom and bust cycle.
What went wrong with 3D Printing Stocks?
As the hype surrounding 3D printing went into overdrive, there was an increasing scramble to purchase stocks in the leading companies. The reality was that earnings were not keeping pace with the extraordinary rise in the stock prices. Much of the hype centered on home 3D printers which both 3D Systems and Stratasys attempted to lead the way into market adoption, with the 3D Cube and the Makerbot respectively. However, the dream of desktop 3D printers appearing in every home almost completely failed to materialize and both companies have abandoned their flagship products and switched back to their core industrial and commercial additive manufacturing services. Both companies, and others in the sector, appear to have steadied the ship and got to grip with fundamentals, and the expectation is now that these companie’s can embark on a period of sustained but realistic long term growth. However, another reason for their stock’s decline was the potential emergence of new competition, in particular the entry of HP into the 3D printing sector.
The top 5 3D printing stocks to invest in.
1 # 3D Systems (DDD) – Still the best stock to own if you want to take a gamble on potentially the world’s ‘first trillion dollar industry’. As stated above, 3D Systems has gone back to basics, cut back on acquisitions and focused on developing the most profitable areas of its business such as 3D bio printing.
2 # Stratasys (SSYS) – The main rival of 3D Systems, Stratasys has also returned to its core business of industrial applications for additive manufacturing after the failure of its famous ‘Makerbot’ home 3D printer acquisition.
3 # Organovo (ONVO) – A 3D bio printing firm that specializes in the design and develops functional, three dimensional human tissue for medical research and therapeutic applications.
4 # Voxeljet (VJET) – German based company is a manufacturer of industrial 3D printing systems. The company has been listed on the New York Stock Exchange since its IPO in the year 2013.
5 # Hewlett-Packard (HPE) – Much the largest company listed here, this printing giant is set to become a big player in the 3D printing market after claiming to have made ‘technological breakthoughs’. But even if this is true, the company is so massive that 3D printing revenue will likely play a small part in earnings for some time, although its sheer size and brand means it could truly disrupt the industry.