With two years’ worth of developed market under their belts, not to mention some consolidation, we’re starting to see some separation between the men and the boys within the world of 3D printing stocks.
To be fair, most 3D printer makers are seeing growth. But, as rapidly as the market is expanding now that the technology is being refined (and prices are coming down), growth itself may not be the best sign of success. From this point forward — and largely beginning with second quarter results — profitability and the quality of acquisitions are now part of the mental equation.
With that as the backdrop, here’s a closer look at Q2’s results for the major 3D printing stocks. Some are doing well, and some are surprisingly lackluster:
Stratasys is Still King of the 3D Printing Stocks
By almost all accounts, Stratasys (SSYS) remains the name for other 3D printer makers to beat, and SSYS stock remains the best prospect among 3D printing stocks.
Its MakerBot line of low-end, consumer-class 3D printers (typically priced below $10,000) have been a huge hit. The line has become so consumer-mainstreamed, in fact, that some Home Depot stores now stock them.
In any case, the second-quarter numbers for Stratasys set an encouraging tone for the rest of the group when they were unveiled last week. Its total revenue of $178.5 million for Q2 represented a 67% year-over-year increase. Granted, sales would have only grown 35% had it not been for acquisitions of other 3D printer companies, but the recent purchases by Stratasys have been fruitful ones.
The company turned a profit of 55 cents per share, which was ten cents better than estimates. The company also ramped up its sales guidance for the year, to something between $750 million to $770 million.
Voxeljet AG Struggles to Find an Identity
Not that the business model has been a complete letdown, but Voxeljet AG (VJET) may confirm that customers and consumers who need 3D printing services would prefer to buy a printer and be done with it, instead of outsourcing 3D printing services.
Voxeljet reported a 46% improvement in system sales for its second quarter, but only saw a 20% increase in 3D printing services revenue. Still, the 31% increase in overall revenue wasn’t enough to narrow the loss. The company reported that its per-share loss grew by 58%.
On the upside, the company’s backlog of 3D printer orders as of the end of June was 86% bigger than the backlog from the same time a year ago. That wasn’t enough to stave off an 8% selloff from VJET stock, however.
Voxeljet AG’s biggest hurdle may be that, unlike Stratasys or 3D Systems, it hasn’t offered the market a clear idea of what it is, what it does, and why it should be a top-of-mind choice.
The ExOne Company Illustrates the “Other” Aspect of 3D Printing
You can say this much for the folks in charge at 3D printing outfit The ExOne Company (XONE) … they’ve got guts. Despite a sizable earnings and revenue miss, the company maintained its previous sales guidance for the full year.
The details of the disappointing bad news: ExOne reported a loss of 32 cents per share of XONE stock for the second quarter, versus the estimated loss of only 14 cents. Revenues were up 21%, reaching $11.2 million. Analysts, however, were expecting a top line of $11.86 million. Nevertheless, The ExOne Company still believes it’s going to drive between $55 million and $60 million in sales for fiscal 2014.
Fun fact: While the overall mummers for ExOne may have been a letdown, the 3D printer company did see a big jump in revenue via sales of printed products and materials. All told, revenue in this category was up 53% on a year-over-year basis, suggesting much of the future for some 3D printing stocks might hinge not on 3D printers themselves, but on the ancillary service or supply businesses they create
3D Systems Remains the High-End Leader of 3D Printer Maker
It may not have been a big miss, but last quarter’s earnings for 3D Systems (DDD) were the first miss in a year. The 3D printer maker earned 16 cents per share of DDD stock last quarter, which was two cents shy of forecasts. Revenue grew from $120.8 million a year earlier to $151.5 million, but that too was shy of analyst expectations for a top line of $162.3 million.
All the same, while Stratasys may be the leader of the consumer 3D printing market, 3D Systems appears to have the strongest foothold in the high-end industrial space. Wednesday’s announcement that 3D Systems had acquired American Precision Prototyping and sister company American Precision Machining — two names well-entrenched in the aerospace prototyping space — bolsters that argument.
Granted, 3D Systems won’t win any value awards anytime soon, with a trailing P/E of 116.1. But, between last year’s 45% increase in revenue and the projected 38% growth in sales for 2014, 3D Systems is effectively growing into its stock’s price.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.