The tech industry has turned around from its declines last year. The Technology Select Sector SPDR Fund (XLK) has gained 35.5% year-to-date, outperforming the broader SPDR S&P 500 ETF Trust’s (SPY) gains of 12.8% over the same period.
Moreover, given the 3D printing subsector’s robust prospects, it could be wise to keep a watch on Nano Dimension Ltd. (NNDM), Materialise NV (MTLS), Stratasys Ltd. (SSYS), and Proto Labs, Inc. (PRLB).
Before we delve into the fundamentals of the stocks, let’s look at the 3D printing industry.
The 3D printing industry has undergone a breakthrough by finding several use cases in industries such as automotive, healthcare, and construction. Nearly one in five manufacturers in the United States use 3D printing technologies. Moreover, it is projected that over 2.46 million units of industrial 3D printers will be shipped worldwide this year.
The aggressive research and development and the growing demand for prototyping applications from various industry verticals are propelling the 3D printing market. According to Precedence Research, the global 3D printing market will reach $98.31 billion by 2032, growing at a CAGR of 18.9% between 2023 and 2032.
Considering these conducive trends, let’s analyze the fundamental aspects of the four Technology - 3D Printing picks, beginning with the fourth choice.
Stock #4: Nano Dimension Ltd. (NNDM)
NNDM, headquartered in Ness Ziona, Israel, specializes in additive electronics, offering 3D printers, robotics, and software for the production of advanced electronic components. They provide innovative solutions for electronic manufacturing using proprietary materials and technologies.
On September 27, NNDM announced that it had filed a patent for analyzing extensive log streams of industrial machines in real-time. It reflects NNDM's commitment to advancing its deep learning-based AI in 3D printing and additive manufacturing, potentially opening up new opportunities for the company.
On September 19, NNDM announced that it had received approval from the Israeli Court to continue its share repurchase plan, which authorizes the company’s management to repurchase American Depository Shares (ADSs) from time to time. This is expected to improve its balance sheet and shareholder returns.
For the fiscal second quarter that ended June 30, 2023, NNDM’s revenues increased 32.8% year-over-year to $14.74 million, while its adjusted gross profit increased 57.9% from the previous-year value to $7.01 million.
Additionally, the company’s net cash from investing activities increased substantially to $75.58 million. NNDM’s total current liabilities as of June 30, 2023, stood at $29.27 million, registering a decrease of 15.2% from $34.51 million as of June 30, 2022.
Over the past year, the stock has gained 14.6% to close its last trading session at $2.67. It has gained 16.1% year-to-date.
NNDM’s solid prospects are reflected in its POWR Ratings. NNDM has a B grade for Momentum. It is ranked #4 among 10 stocks in the Technology - 3D Printing industry. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
In addition to the aforementioned POWR Ratings, we have also given NNDM’s ratings for Growth, Value, Stability, Sentiment, and Quality. Access all NNDM ratings here.
Stock #3: Materialise NV (MTLS)
MTLS, headquartered in Leuven, Belgium, operates in the additive manufacturing and medical software industries, providing 3D printing services and software solutions. The company functions through three segments, Materialise Software; Materialise Medical; and Materialise Manufacturing.
On September 27, MTLS introduced a 3D-printed eyewear with an innovative translucent material. This material enhances MTLS' business by expanding design possibilities for eyewear manufacturers, catering to consumer demand. This innovation may contribute to the company’s growth in the eyewear market.
On August 23, MTLS announced the opening of a new 3D printing facility in the United States, specializing in the production of personalized titanium cranio-maxillofacial (CMF) implants for facial reconstructive surgery. This is expected to enhance the operative capability of the company.
MTLS’ revenue for the fiscal second quarter that ended June 30 increased 11.6% year-over-year to $70.42 million, while its gross profit increased 15.7% from the previous-year value to $40.26 million.
Its adjusted EBITDA came in at €4.76 million ($5 million), showing an increment of 12.1% from the prior-year quarter. Also, As of June 30, 2023, MTLS’ total current liabilities stood at €98.33 million ($103.34 million) decreased 7.3% from €106.11 million ($111.51 million) as of December 31, 2022.
Street expects MTLS’ revenue to increase 8.9% year-over-year in the current quarter (ending December 2023) to $73.31 million. For the current year (fiscal 2023), its revenue is projected to reach $286.80 million, registering an increase of 15.1% from the prior year.
The stock has declined 2.8% over the past five days to close the last trading session at $5.03.
It’s no surprise that MTLS has an overall B rating, equating to a Buy in our POWR Ratings system.
It has an A grade for Value and a B for Sentiment. It is ranked #3 within the same industry.
Beyond what is stated above, we’ve also rated MTLS for Growth, Momentum, Stability, and Quality. Get all MTLS ratings here.
Stock #2: Stratasys Ltd. (SSYS)
SSYS provides polymer-based 3D printing solutions, offering a range of 3D printing systems, materials, software, and services for various industries, including automotive, aerospace, and healthcare.
On September 27, SSYS announced the completion of its sale of the Stratasys Direct, Inc. urethane facilities located in Poway, California, to the Lamarjean Group, dba, as PolyCraft Tech.
Dr. Yoav Zeif, CEO of SSYS, said, "This is an important step in aligning the business to the company’s growth strategy and streamlining the organization for improved efficiency."
In August, SSYS declared that its recently-introduced 3 DentaJet multi-material 3D printer has become popular in dental labs as a cost-effective entry-level solution to boost productivity. This reflects the company’s ability to provide innovative products for its customers.
SSYS’ net sales for the fiscal second quarter that ended June 30 came in at $159.75 million, while its non-GAAP gross profit came in at $77.51 million. Its non-GAAP operating income increased 158.9% year-over-year to $5.01 million.
The company’s non-GAAP net income rose 115.6% year-over-year to $2.53 million. Also, its non-GAAP income per share rose 100% from the same period last year to $0.04.
Analysts expect SSYS’ revenue for the quarter ending December 2023 to increase 9.4% year-over-year to $174.16 million. Its EPS for the same quarter is expected to increase 42.9% from the year-ago value to $0.10. It surpassed the consensus EPS estimates in each of the trailing four quarters, which is impressive.
The stock slumped marginally intraday to close the last trading session at $11.39.
SSYS’ POWR Ratings reflect solid prospects. It has an overall rating of B, which translates to a Buy in our proprietary rating system.
It is ranked #2 in the same industry. It has a B grade for Growth and Momentum. Click here to see SSYS’ Value, Stability, Sentiment, and Quality ratings.
Stock #1: Proto Labs, Inc. (PRLB)
PRLB is a global e-commerce digital manufacturer specializing in custom prototypes and on-demand production parts using various technologies, including injection molding, CNC machining, and 3D printing. The company’s services cater to developers and engineers across different industries.
On July 17, PRLB announced the expansion of its CNC machining capabilities to offer accelerated anodizing and chromate plating on aluminum components, enabling custom-machined parts with plating in as fast as four days. This expansion should add to the company’s revenue stream.
PRLB’s total revenue for the second quarter that ended June 30, 2023, came in at $122.27 million. Its non-GAAP gross profit came in at $53.93 million. The company’s income from operations increased 7.8% year-over-year to $5.61 million.
For the six months ended June 30, its net cash provided by operating activities, and cash and cash equivalents balance increased 2.7% and 21.6% from the prior-year period to $31.87 million and $66.49 million, respectively.
Street expects PRLB’s revenue for the fiscal year 2024 to increase 3.3% year-over-year to $507.07 million. Its EPS for the same year is expected to increase 6.2% from the prior year to $1.24. It surpassed Street EPS estimates in each of the trailing four quarters.
The stock has gained marginally year-to-date to close the last trading session at $25.59.
It’s no surprise that PRLB has an overall rating of B, which translates to a Buy in our proprietary rating system.
It has a B grade for Value, Momentum, and Quality. Within the industry, it is ranked first.
Beyond what we stated above, we also have given PRLB grades for Growth, Stability, and Sentiment. Get all PRLB ratings here.
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SSYS shares were trading at $11.62 per share on Monday afternoon, up $0.23 (+2.02%). Year-to-date, SSYS has declined -2.02%, versus a 15.40% rise in the benchmark S&P 500 index during the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.
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