For the second day in a row, one 3D specialist has been trending as its stock enjoys time in the spotlight. Desktop Metal (NYSE:DM) is noted for its work within the field of 3D-printing systems, specifically in designing and marketing new technologies made from metal and carbon fiber Its flagship product is the Production System P-50 printer, and Desktop recently announced that it will be ramping up its production as it triples manufacturing capacity at its Massachusetts facility. Despite a rough morning, DM stock has overall reacted very well to this news.
What’s Happening With DM Stock?
Since the trading week began, Desktop Metal has risen by more than 19% from where it was when markets closed on Friday. While DM stock is down by 6% today, it has been bouncing all morning. Shares are up almost 13% for the past five days.
DM stock isn’t the only one in its industry that has been in the red this morning. Shares are also down for Voxeljet (NASDAQ:VJET), Stratasys (NASDAQ:SSYS) and Proto Labs (NYSE:PRLB), all of which were named to a list of best 3D printing stocks in May 2021.
Despite this less-than-ideal start to trading today, investors should evaluate Desktop Metal through a lens of optimism as the company forges into the year ahead.
Why It Matters
3D printing is a rapidly growing field and Desktop Metal knows it. While media focus on the sector may fluctuate, that doesn’t mean that the demand for the services provided by these companies declines. The potential for the 3D printing sector has been well documented by InvestorPlace analyst Luke Lango, who claimed that it had the potential to generate more 10X winners than any other, noting that Wall Street remained largely unconvinced of the industry’s potential.
One reason for the growth potential is the ability of 3D printing companies to fill demands in other evolving sectors. Desktop Metal just reminded us of that.
One reason for the recent expansion in its metal printing division is the growing demand for 3D printing into the auto parts industry. The supply chain crisis is posing many negative effects for auto makers everywhere, but 3D printing technology could be what saves them as demand for new cars increases.
What It Means
The need for 3D printing isn’t going to stop at auto parts. Companies in areas such as construction and manufacturing are also feeling the strain of the supply chain crisis. Any sector that relies on imported components will continue to struggle well into 2022, but 3D printing could prove a vital part of the solution.
What do the experts think about Desktop? The most recent price targets were issued several months ago but they range between $9 and $14.
- Troy Jensen of Lake Street issued a $9 price target on DM stock four months ago while calling for a “sell.” He saw the upside being very low at just over 13%.
- A month earlier, Greg Palm of Craig-Hallum set a $10 price target, maintaining a “hold” position with a higher upside of almost 26%.
- In the same month, Matthew Crabal of Credit Suisse issued a high price target for DM at $14. He maintained his position of “hold,” forecasting upside of more than 76%
It’s worth noting that these predictions were made well before anyone knew about Desktop’s plans to expand. The company is taking significant steps to establish itself as a key player in a market that is growing rapidly. By tripling manufacturing capabilities, the company is ensuring that it will be able to meet the demand that the coming year will bring.
Once the factory is turning out three times its previous output, it is probable that it will pass the $10 mark. While this will take months, it could certainly go as high as $14.
3D printing as a sector shouldn’t be underestimated and Desktop Metal really shouldn’t be. DM stock has the high potential to soar in 2022. Anyone considering a bullish play on 3D printing stocks should be watching it closely.
On the date of publication, Samuel O’Brient 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.