This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Why 3D Printing Is Here to Stay

Updated from 9:07 a.m. to include more analysis in the ninth paragraph.

NEW YORK (TheStreet) -- The hype surrounding 3-D printing is enormous, given the implications for the manufacturing, retail, and technology industries. With HP (HPQ - Get Report) reportedly set to enter the market later this year, not only could we begin to see increased interest in the market, but a validation, as well.

UBS analyst Steve Milunovich has initiated coverage on the sector, putting a "neutral" rating on 3D Systems (DDD - Get Report) and a "buy" rating on Stratasys (SSYS - Get Report). Milunovich notes that 3D printing "is disruptive and part of the unscaling trend," building objects layer by layer. Milunovich believes that 3D printing truly has disruptive potential, as it changes facets of the manufacturing business, from aerospace companies using it for airplane parts, to consumers making toys and clothes. When combined with cloud services for additional measures, "3D printing is part of an 'unscaling' trend shifting power from mass to customized production."

The 3D printing market is still in its early stages, with Milunovich noting it's growing "at least" 20% to 25% annually, as it moves beyond the initial hobbyist and early adopter stages, into a much greater market segment. Terry Wohlers, an industry consultant for the 3D printing market, notes the market could reach $4 billion in 2015, up from $2.2 billion last year, and potentially reach $8 billion in revenue in 2019. Despite companies like Brooklyn-based MakerBot (owned by Stratasys) focusing on the home market, and trying to drive consumer adoption, the biggest opportunities, Milunovich notes, are in the enterprise. He notes that around 25% to 30% industry revenue is from actual printer sales, with the rest from materials and services.

Must Read: Top 50 Cash-Rich Companies In the U.S.

Shares of 3D Systems were active in pre-market trading, up 1.4% to $59.97, while Stratasys was not. Shares of Stratasys closed yesterday at $106.09.

The benefits of 3D printing are enormous, including cutting down on the complexity of the manufacturing process and the skills required for actual assembly or manufacturing the parts.  3D printing also provides the ability to use various materials to build products, such as ceramics, carbon, and other high-density elements, to form sturdy parts. "Aerospace, automotive, healthcare, machines tools, and fashion are large market opportunities," Milunovich stated in the note.

Companies like 3D Systems and Stratsys have been the early leaders in the space, and the market has reflected that in their stock prices. Shares of 3D Systems and Stratsys are up 83.5% and 42.9% over the past year, respectively.

DDD ChartDDD data by YCharts

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
DDD $19.02 2.10%
HPQ $30.72 0.66%
SSYS $34.66 0.96%
FB $87.13 0.25%
GOOG $522.74 0.17%

Markets

DOW 17,718.96 -38.95 -0.22%
S&P 500 2,073.06 -4.36 -0.21%
NASDAQ 4,999.0930 -14.03 -0.28%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs