2022 was unkind to growth stocks of all stripes, but the sell-off in the top 3D printing stocks started much earlier. After a strong run-up off the pandemic lows, the 3D Printing ETF (CBOE:PRNT), an equal-weighted index of approximately 50 companies involved in the 3D printing industry, topped out in early 2021 at around $50. Today, it trades for less than half that.
While the ETF is up nearly 19% so far in 2023, slightly outperforming the S&P 500, the performance of individual 3D printing stocks has been mixed. Case in point: Two of today’s 3D printing stocks to buy are up around 40% year to date while one is down about that much.
As an industry, 3D printing is still in the early innings. According to Grand View Research, the market is expected to expand at a compound annual growth rate (of 23.3% through 2030. )
As investors look for ways to play burgeoning technologies, money should continue to flow into the top 3D printing stocks. Below are three ways to get in on the action.
Nano Dimension (NNDM)
Israel-based Nano Dimension (NASDAQ:NNDM) manufactures additive electronics, including the DragonFly IV 3D printer. The volatile penny stock is up 40% on a year-to-date basis following a massive rally over the past few weeks.
The move higher was fueled by the company’s latest quarterly results. For Q1, Nano reported record revenue of $14.97 million, up 24% year over year and 43% from the previous quarter. Further, the company posted a $22 million profit compared with a loss of $33 million in the year-ago quarter.
While Nano’s fundamentals and growth potential are solid, the firm is embroiled in a legal battle with Stratasys (NASDAQ:SSYS) regarding a potential hostile takeover bid. If you can stomach any additional volatility that may cause, NNDM deserves a place among the best 3D printing stocks for investment.
FARO Technologies (FARO)
FARO Technologies (NASDAQ:FARO) is the underperformer on today’s list of 3D printing stocks to buy. Shares are down 45% so far this year. This includes a sharp sell-off following the release of the company’s first-quarter results in early May.
While sales rose 11% year over year to $85 million, the company reported a much larger-than-expected net loss of $7.1 million compared with a $2.5 million loss in the same quarter one year ago. The company noted that cost increases hurt its gross margin, which fell to 46.7% from 53.5% in the year-ago period.
With inflation abating, FARO should be able to get a handle on its costs. And with the stock trading near a five-year low, investors have a chance to pick up shares at a discount. FARO currently trades at just 0.8 times sales, well below its 10-year median of 2.3.
FARO Technologies has been in business since 1981 and isn’t at risk in any palpable sense. Once it can show that product costs have normalized, the stock could make a quick run higher as it starts to play catch-up with its peers.
Ansys (NASDAQ:ANSS) provides engineering simulation and 3D design software. It is the highest-priced name on today’s list of 3D printing stocks to buy, trading at around $340 per share. It is also the most stable of today’s picks, routinely producing earnings for shareholders.
Ansys’ first-quarter earnings, reported on May 3, were particularly impressive. Revenue jumped 20% from a year ago to $509.4 million. Meanwhile, net income increased by 42% year over year to $100.6 million as the company’s profit margin improve substantially. The strong results gave management the confidence to raise full-year revenue and profit guidance.
The firm is scheduled to release Q2 earnings on Aug. 2. Given that it has beaten analysts’ consensus earnings estimate in each of the past four quarters, another positive surprise may be in store this week. A beat could cause a pop in shares. But if we instead see a post-earnings pullback, investors may want to buy the dip in this top 3D printing stock.
On the date of publication, Alex Sirois 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.