3D Printing in the Spotlight

What are the hottest developments in 3D printing? And what are the interesting companies to watch?

Shares in leading 3D printing stocks have collapsed by up to 40% in the last three months. 3D printing, or “additive manufacturing”, is the process of joining materials to make objects from three dimensional model data, usually layer upon layer. In 2013, the 3D printing industry was worth $3bn. In a new report by CM Research the industry will be worth $14bn by 2020, implying a CAGR of 25% for the next six years. Wohlers Associates, the industry’s leading consultants, are less optimistic – they forecast a $10bn market by 2020.

Among the predictions contained in this new research, equity analyst Cyrus Mewawalla looks at hardware, software, services and the disruptive challenges ahead in this in-depth investment and industry analysis.

On the hardware front, after three years of industry consolidation, two dominant 3D printer manufacturers – 3D Systems and Stratasys – have emerged. Whilst short term momentum is against them, CM Research believes that on a five year investment horizon they are both undervalued. Both have developed unrivalled 3D printing ecosystems and are poised to make supernormal profits if 3D printing goes mainstream. Whilst Stratasys appears cheaper on an earnings basis, 3D Systems has a stronger market position – both across the value chain and across the various technologies. Further consolidation is likely as the big two take out more rivals. Niche players like Arcam, a Swedish metal-based 3D printer maker are likely, says Mr Mewawalla, to become acquisition targets. The report also looks at Organovo, the bio tech company that has found a way to print human tissue.

On the software front, many industry experts encourage investors to play the 3D printing theme through software. But Mr Mewawalla argues that Autodesk, the software player most associated with 3D printing is already expensive, trading at 46 times forward earnings. For the others – Dassault Systemes, Cimatron, Adobe, PTC and Ansys – 3D printing accounts for a tiny share of revenues. Moreover, there are as yet no industry standards for 3D printing software in the way that Apple and Google have set the software standards for smartphones. Until there is a clear standard-setting winner picking winners remains difficult. theme.

On the 3D printing services front, the really sexy services companies – like Shapeways or Etsy – remain private. However, CM Research has identified three – Proto Labs, Cognex and Faro Tech – that are worth a closer look. The report also considers the old economy and explains why the prototyping industry is likely to be the first to be disrupted. Within three to five years, CM Research says to expect new entrants threatening dominant players in the toys, autos and apparel sectors. Longer term healthcare, aerospace and logistics will have to adapt to survive too.

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Here are the report contents:

INVESTMENT SUMMARY

  • Hardware
  • Software
  • Services
  • Share price performance

INDUSTRY ANALYSIS

  • Market size forecasts
  • Demand vs. supply
  • Industrial vs. consumer units
  • Competitor landscape
  • Mergers and acquisitions

COMPANIES SECTION

  • 3D Systems

Stratasys

  • Industrial 3D printer manufacturers
  • Consumer 3D printer manufacturers

DISRUPTIVE IMPACT ON OLD ECONOMY INDUSTRIES

  • Prototyping
  • Health care
  • Toys
  • Apparel
  • Automotive
  • Aerospace
  • Jewellery
  • Food
  • Logistics
  • Piracy

TECHNOLOGY BRIEFING

  • Definition
  • The eight leading 3D printing technologies
  • Applications
  • The Additive Manufacturing Technology Matrix

APPENDIX: 3D PRINTING SERVICES COMPANIES

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