by Dan Burrows | November 27, 2013 10:51 am
3D printing stocks look like the kind of long-haul buys that could generate big returns. After all, 3D printing stocks represent an exciting new technology with a wide swath of applications in any number of industries. Heck, companies are even experimenting with “printing” human organs — so you can see why the market is so excited by 3D printing stocks.
But as with every hot new technology, it could be a while before the real winners and losers emerge. That’s why you need to proceed with caution when it comes to 3D printing stocks.
So, if you’re looking to make an investment in any sizzling 3D printing stocks, remember that these are high-risk plays and you’re better off betting on a number of companies instead of just one of the 3D printing stocks.
Size matters, too. 3D printing stocks with larger market capitalizations like 3D Systems (DDD), Stratasys (SSYS) and ExOne (XONE) all trade on a major exchange, with all the regulatory scrutiny that requires. These 3D printing stocks are also firmly established and have trading liquidity. That means you’ll be able to buy these 3D printing stocks when you want at close to the prices you want, and sell these 3D printing stocks very close to the prices you want.
With that in mind, here’s a look at the largest 3D printing stocks by market cap — DDD, SSYS and XONE.
Market Cap: $7.7 billion
YTD Performance: 111%
3D Systems (DDD), the largest security among 3D printing stocks by far, has also put up some of the best year-to-date returns. Indeed, DDD stock has more than doubled so far this year.
In case the DDD stock ticker didn’t clue you in, 3D Systems is one of the core 3D printing stocks. It manufactures a wide portfolio of 3D printers, as well as scanners and software.
3D Systems’ biggest recent splash was inking a deal with Google’s (GOOG) Motorola division to manufacture parts for a modular smartphone. That makes DDD a key player in what could be a game-changer for the mobile device market — and perhaps for all 3D printing stocks too.
For the most recent quarter, 3D Systems turned a profit of $17.7 million on revenue of $135.7 million. Wall Street expects DDD to grow earnings at an average annual rate of 24% a year for the next five years or so. Torrid growth is a feature of 3D printing stocks, and DDD stock is definitely a leader in that arena.
Market Cap: $5.8 billion
YTD Performance: 48%
Stratasys (SSYS) is another one of the 3D printing stocks with a more-than-respectable market value. At nearly $6 billion, SSYS stock is a large midcap or even a small large cap, and it has put up a market-beating year-to-date gain of 48%.
Like DDD, Stratasys is a core company among 3D printing stocks, specializing in 3D printers and materials. SSYS allows designers to build concept models and functional prototypes for everything from consumer products to aerospace parts.
Probably the most interesting recent development at Stratasys is the introduction of its Mini Metal Maker 3D printer. Sort of a little brother to MakerBot — already a hit for SSYS – the Mini Metal Maker could score big with custom jewelry manufacturers and anyone else working in metal … and could send SSYS stock even higher.
For the most recent quarter, Stratasys had a net loss of $6.6 million on revenue of $125.6 million. SSYS stock only has a long-term earnings growth forecast of 10% a year, though, which is a bit low when looking at 3D printing stocks.
Market Cap: $771 million
YTD Performance: 101%
ExOne (XONE) is the smallest of the larger 3D printing stocks. Indeed, it is indisputably a small cap — and not that far removed from having been a microcap. But after doubling so far in 2013, XONE stock is gunning for midcap status in the not-too-distant future.
ExOne specializes in 3D printers that allow designers and engineers to produce both prototypes and production parts, and has found a place in everything from the automotive to energy industries.
In a blow to the 3D printing stocks sector, XONE stock recently sold off after reporting a tough third quarter. ExOne posted a surprise loss of 2 cents a share when Wall Street was looking for a profit of a penny per share of XONE stock. Additionally, revenue of $11.6 million missed analysts’ average forecast by $600,000.
On a more positive note, XONE did report its first-ever operating profit. And although revenue missed projections, it still grew nearly 37% year-over year. XONE stock analysts haven’t put a long-term growth forecast on ExOne.
But it still joins DDD stock and SSYS stock as one of the best 3D printing stocks to consider.
As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.
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