3D printing technology has been around for several years and has experienced remarkable growth in recent years. Its multiple use-cases in various sectors have made it a lucrative investment area. Moreover, the market is expected to reach even greater heights, making 3D printing stocks incredibly exciting prospects.
The potential of 3D printing in improving supply chain and manufacturing practices has created a wealth of opportunities for manufacturers of 3D printers. Moreover, the rising demand for healthcare supplies during the Covid-19 pandemic has been major catalyst for the sector.
Additionally, the ability of 3D printing tech to decrease the time taken to produce functional parts leads to the rapid development of prototypes without reconfiguring the manufacturing line.
Having said that, let’s look at three of the most promising 3D printing stocks which appear to be moving the needle for the sector:
3D Printing Stocks To Buy: Desktop Metal (DM)
Desktop Metal is one of the leading 3D printing companies globally, benefiting from the current manufacturing trends. Among the more popular 3D printing processes is binder jetting, which is one of the techniques which can transform manufacturing. Desktop Metal specializes in this technique, and its production system is the most efficient 3D printer in the industry.
Moreover, analysts expect an incredible growth runway ahead. Analysts expect 2021 revenue of $105.5 million and 2023 revenue of $392.5 million, a 93% compound annual growth rate.
One of the key risks with the company is its ability to withstand its competition. In sensing the threat, the company has recently acquired one of its largest competitors in ExOne, a major player in binder-jetting technology.
Revenues are likely to grow at a strong clip, and recurring revenue streams will significantly boost free cash flow margins. Therefore, DM stock has a bright future ahead. It could become the pick of the 3D printing stocks.
Proto Labs (PRLB)
Proto Labs is an integrated provider of manufacturing solutions and rapid, low-volume custom parts. Its services are centered on 3D printing and injection molding, among other areas.
Moreover, with its recent acquisition of Hub, an online manufacturing platform, Proto Labs plans to become a one-stop shop for e-commerce manufacturing. With the acquisition, the company’s total serviceable market has grown from $16 billion to $100 billion.
Proto Labs’ financial performance has been stellar overall from 2016 to 2019. Top-line growth dipped significantly during the pandemic, but it’s now back to winning backs again. During the first three quarters of fiscal 2021, revenues rose to $364.5 million, representing a healthy 10.7% rise over the $329.2 million it generated in the same period last year.
Growth was particularly impressive during the third quarter, where revenues grew 16.6% from the prior-year period. On top of that, PRLB stock trades at just three times forward sales, adding to its attractiveness.
3D Printing Stocks To Buy: Stratasys (SSYS)
Stratasys is a producer of polymer 3D printers boasting over 1,500 additive technology patents. The company serves multiple large players in several sectors, including education, healthcare, dental, medical and aerospace. Moreover, it has invested a significant amount of resources in R&D to continue improving its product offerings.
Operating results have been impressive in the past couple of quarters, where it delivered double-digit growth from the prior-year period. As we look ahead, experts believe that it could deliver an 11% CAGR through 2023 taking its revenues to $749 million.
Stratasys has the broadest and technology offering in the 3D printing sector, which is why it has a healthy growth runway ahead.
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.
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.