3D Printing Hype May Be 'Overdone' - Analyst (DDD) (SSYS) (XONE)

December 9, 2013 8:02 AM EST
Get Alerts SSYS Hot Sheet
Price: $18.86 --0%

Rating Summary:
    14 Buy, 14 Hold, 4 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 2 | Down: 10 | New: 4
Trade Now! 
Join SI Premium – FREE
Analysts at Nomura tackled one of the market's hottest sectors today - 3D printing - and they are not overly positive on it. Analyst James Kim believes the market hype on 3D printing is overdone, with volume growth likely to be limited in the long run.

"We think recent market optimism about the "Third Industrial Revolution" potential of 3D printing is overdone, given uncertain growth potential in the consumer market, limited pragmatic applications, and a lack of mass-production ability," Kim states.

He adds, "We do not expect 3D printing to garner a meaningful share of the global manufacturing industry in the near term, with the total market size of 3D printing, as per Wohlers Associates, estimated to grow to USD6bn by 2017 (from c.USD2bn in 2012), largely falling short of the conventional manufacturing space (c.USD93bn)."

While Kim believes they hype is overdone, he said major 3D printing system developers with consumable business like Stratasys (NASDAQ: SSYS), 3D Systems (NYSE: DDD), Envisiontec and pure raw material suppliers could be long-term beneficiaries of 3D printing development, on expected sustainable demand for consumables in large volume. "On the flipside, however, we expect the volume growth of printing machinery to slow down after the initial adoption phase," he also said.

Amongst the 31 major industrial 3D printing companies, Stratasys and 3D Systems take up a lion's share of the global 3D printers market – 57% and 18%, respectively, the analyst notes. The analyst also mentions ExOne's (NASDAQ: XONE) binder jetting technology which is employed by Ford Motor Company to create prototype parts for vehicles, such as transmission cases, brake rotors, and four-cylinder engine blocks. Organovo (NASDAQ: ONVO) has a 3D bioprinting technology that feeds human cells, or "bio-ink," as raw material to create functional human tissues. The company has developed the world’s first commercial bioprinting platform called NovoGen MMX Bioprinter, which not only produces 3D-printed human veins, arteries, and even heart cells on customers’ demand, but also is likely to expedite drug discovery procedures.

On the 3D printing software side, Dassault Systemes SA, Autodesk (NASDAQ: ADSK), ANSYS Inc. (NASDAQ: ANSS) and PTC Inc. (NASDAQ: PMTC) were mentioned. In services, Proto Labs Inc. (NASDAQ: PRLB) was noted.



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

Analyst Comments, Momentum Movers, Short Sales

Related Entities

Nomura