Tuesday was a rather quiet trading day for the U.S. market, with Nasdaq and Dow index both marginally rising by 0.1%. Conversely, the day turned out to be good for the sluggish 3D printing sector. The biggest gainer during yesterday’s trading session was 3D Systems Corp. DDD that jumped by about 5.5%, probably on the resurfaced rumor of the company’s merger with technology and financial services giant General Electric GE.
Other notable names in the space that trailed 3D Systems are The ExOne Co. XONE, Voxeljet AG VJET, Perceptron, Inc. PRCP and Stratasys Ltd. SSYS escalating nearly 5.2%, 4.5%, 3.4% and 2.5%, respectively.
Captivating people with wide-ranging speculations about extensive applications of 3D printing in the future, the 3D printing technology emerged on a high note in 2013. However, as people realized the complexity and high-cost affair of this technology, it started to lose its spark in the beginning of 2014.
What followed was a spate of earnings disappointments, spending concerns, contracted margins and multiple compression. Since then, with momentary ups and downs, the 3D printing stocks have been hovering around the bottoms.
Growth Catalysts
3D technology has the potential to revolutionize manufacturing and enliven the commercial and professional space. The companies, ranging from hospital managers to car markers, are now opting for varied 3D solutions to address simple make-to-stock orders to complex, engineer-to-order production strategies.
Apart from aerospace and defense, the trillion-dollar oil & gas industry has forayed as a prospective end-market for 3D printing. Presently, 3D technology is applied to provide customized plastic items, like 3D-printed tissue and organs, metal parts for cars and jet engines, to name a few.
Figures Promising Bright Prospects
The market experts have immense faith in the future potential of this technology and expect it to become a viable alternative across several market segments. According to a report available at ReportsnReports.com, the global 3D printing market is expected to increase at a CAGR of 23% from 2013 to 2020 and hit $8.41 billion buoyed by higher demand in the healthcare and aerospace markets.
Moreover, automotive consumer products, government and defense, industrial/business machines, education research, and others (arts and architecture) sectors are expected to raise the demand for 3D printing products. Additionally, TechNavio forecasted the global 3D Printer market to grow at a CAGR of 45% (2014-2019).
In order to capitalize on the industry’s robust prospects and consolidate their market share, the premium 3D stocks have been executing strategic acquisitions to take 3D printing to a completely new level. They are increasingly focusing on diversifying their offerings, adding synergistic technology and expanding their domain expertise across cross-industry continuum. Established players like 3D Systems and Stratasys have been pretty much leading among them with their spree of aggressive acquisitions and product launches.
Prospects Luring New Entrants
The industry is seeing a plethora of new entrants and new technologies on a regular basis, especially as the barriers to entry are fast eroding. The influx of industry players, particularly from Asia, is likely to accelerate the technological progress of the industry.
Most recently, Hewlett-Packard Co. HPQ enriched its much coveted ‘Sprout’ device that enables 3D scanning and capture of items of various sizes and creates instant 3D printables. Other industry toppers like General Electric and The Boeing Co. BA are also heavily investing into the technology.
Bottom-Line
We believe that as 3D printing begins to permeate across more sectors, the time is ripe for investors to enter the arena and ride the impending wave of growth. Moreover, the entry of new players will act as a catalyst for the industry and has the potential to redefine market dynamics in the troubled 3D printing space. In fact, this has catapulted the spending on research and development at various smaller or rival 3D printing companies.
Investors should watch out for the 3D printing space in 2015, as the industry seems to be on the brink of a major transformation, with expanding end markets, burgeoning applications for the technology and rising new debutants.
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