3d printing companies stock motley fool
The 1 3D Printing Stock I Want to Own in -- The Motley Fool
Founded in by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. If you're considering investing in 3D printing stocks, you should have a long-term outlook, as there could be more volatility ahead in this fast-evolving space. Expectations were too high in and , when these stocks were driven up to extremely lofty valuations, before they came crashing back down to Earth.
Moreover, the industry's largest players, 3D Systems NYSE: SSYS , have been struggling since to grow revenue and to earn a profit due to a slowdown in demand for their products and services. Internet-enabled, quick-turn manufacturing service provider Proto Labs isn't a pure play on 3D printing, as its on-demand services also include the traditional manufacturing techniques of plastic injection molding and CNC computer numerical control machining of metals.
The company produces prototypes and provides short-run production services to customers in a wide range of industries. Here's how Proto Labs' revenue broke down by service segment in However, Proto Labs' organic 3D printing growth has also been solid.
Organic growth includes only revenue from businesses that have been owned for at least one year. For instance, if we exclude unprofitable contracts at Alphaform that Proto Labs terminated, the company's 3D printing revenue in the fourth quarter of increased Proto Labs owned Alphaform in both the last quarters of and , so this was the first quarter in which there was no bump due to the acquisition.
Proto Labs has a notable competitive advantage over 3D Systems, Stratasys, and other manufacturers of 3D printers: Proto Labs doesn't make 3D printers or any physical product, so it doesn't have a vested interest in any particular 3D printing technology emerging as a winner. Its only goal is to provide services that best meet the needs of its customers, so it has equipment from many manufacturers in its facilities.
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On an adjusted basis, net income declined 8. Part of the reason for the earnings decline is that the gross margin of Proto Labs' European 3D printing operation, which it acquired in , is lower than the gross margin of its U. It takes a while to integrate new businesses. Moreover, improving the gross margin of the European 3D printing operation is one of the company's top priorities in The stock is currently trading at Thus, it has the financial muscle to continue to invest in growing its business.
They both have some valuable intellectual property and have been developing compelling next-generation technologies. However, Proto Labs has been executing better.
Both of the leading 3D printing companies, especially 3D Systems, have made some big missteps in the last few years. That said, both companies have new CEOs as of last year. In time, it should become clear how well each of the new top management teams can strategize and execute. Beth McKenna has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Proto Labs.
One 3D Printing Stock You Might Be Overlooking -- The Motley Fool
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