Global 3D printer market on a growth spiral

17 July 2017

 

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The global 3D printer market continues to grow with sales up 18 per cent in 2016.

Demand for 3D printers is strongest within the Asia-Pacific region. However, the North American market, despite a small recovery, still saw sales down from the previous 12-month period, according to research firm IDC.

Shipments in specialist manufacturing for the technology sector saw the largest growth at 30 per cent. Meanwhile, sales of powder-bed fusion-based printers increased by almost 40 per cent.

Keith Kmetz, program vice president-3D printing at IDC, said:“3D printing will enable revolutionary opportunities in commercial and industrial applications, with earliest success in manufacturing and healthcare. Our predictions create a framework for IT and line-of-business executives to plan and execute technology-related initiatives in the year ahead.”

According to IDC, ‘Discrete Manufacturing’ is the dominant industry for 3D printing, delivering more than two thirds of all worldwide revenues through much of the forecast.

While all the industries examined will experience revenue growth of more than 100 per cent over the forecast period, healthcare will leap from the number five position in 2016 to the number two spot in 2020, with revenues growing to more than US$3.1 billion.

IDC said the gains in both software and on-demand parts printing are being driven by the rapidly expanding use of 3D printing for design prototyping and products that require a high degree of customisation in non-traditional environments.

Another report on the 3D printing market by Markets and Markets predicts that the sector will be worth around US$30 billion by 2022.

The desktop 3D market is expected to see the highest growth rate with the education sector driving growth.
Laser metal deposition (LMD) printing technology will also continue to grow, resulting in a reduction of material waste during the printing process, tooling costs and cost of repairs.

3D Systems: Shrinking Cannot Help Growth

Summary

Company discontinuing production of Cube consumer printer.

Revenue generation was already company’s biggest issue.

A large chunk of the recent rally has been wiped out.

3D Systems Corp.On Monday morning, 3D Systems (NYSE:DDD) announced that it would stop production of its $999 consumer 3D printer, the Cube. With the 3D printing business not taking off in recent years as hoped, the company has struggled to grow revenues and is looking for better returns on investments and higher earnings. Unfortunately for the stock, another hit to revenues and the associated write down has eliminated a large chunk of the recent rally.

I understand that the current management team, which includes an interim CEO, is looking for ways to improve the business. However, the consumer 3D printing market was supposed to be a huge part of this industry’s growth over the next couple of years. 3D Systems has underperformed in a significant way, with revenue estimates for this year coming down dramatically in the past year and a half.

Source: Yahoo! Finance analyst estimates

In the press release, management stated that revenues will be impacted by less than 2%. While that doesn’t seem like much, we’ve seen the overall revenue estimate for this year come down by $287 million since July 2014. Now, the company is talking about taking off another $12.5 million or so of revenues, and this year was already projected to see a 1.4% decline. When your biggest problem is revenue generation, eliminating part of your business doesn’t always seem like the best idea.

Management says that the move will help with profitability, but that’s after the huge write-down of inventory. Don’t forget, analysts are using non-GAAP earnings for their EPS estimates, as the company’s true bottom line number is actually much worse. In 2016, analysts were looking for a non-GAAP EPS rebound to $0.28, after $0.13 this year and $0.70 in 2014. Part of Monday’s news will help with that EPS rebound, but we’re still talking about a business in much worse shape than it was in 2014, and we are only looking at adjusted EPS.

I also believe that this announcement was poorly timed, as we had recently seen a shift in sentiment regarding this stock. Shares were looking to find a bottom, and a number of shorts were covering. In fact, as you can see in the chart below, short interest was at its lowest point since May 2014. That’s despite a roughly 7 million share, or 7% increase, in the stock’s float. The number of investors betting against this stock had finally started to turn.

Source: NASDAQ DDD short interest page

As the company looks to overhaul the business, management believes stopping production of the Cube will help with profitability, after taking out the necessary write-down of course. Unfortunately, this was a company that was struggling to grow revenues, so chopping off another 2% or so of the top line hits the company where it hurts most. Shares of the company had recently started to rebound from their multi-year lows, and short interest was continuing to fall, but about 30% of the recent rally has been eliminated thanks to this decision. This news puts an end to the company’s dreadful 2015 year, but if we see more announcements like this in the coming weeks, it wouldn’t surprise me if shares retest their 52-week low.

3D Printing 2015-2025 Industry Key Trends, Size, Growth, Shares And Forecast Research Report …

Albany – NY, Oct. 21, 2015 (GLOBE NEWSWIRE) — This 138 slide report (PDF) covers the current and future status, opportunities and market forecasts of 3D printing. It contains many illustrative and analytical figures and tables plus company profiles from across the globe.Upon request the original PowerPoint can be included free of charge as part of the report purchase.3D Printing3D printing has received much attention in the press over recent years. Hyped as the technology to bring about a 3rd industrial revolution, 3D printing technologies were in fact invented in the early 80s. They remained a niche technology until the expiration of a key patent in 2009 allowed many startups to emerge offering cheap consumer-level 3D printers. A media frenzy in 2012 thrust 3D printing into the limelight and major players are reporting dramatic growth in everything from consumer to high-end metal printers.Get Sample Research Report: http://www.researchmoz.us/enquiry.php?type=S&repid=2362983D printing encompasses a variety of different printing processes. The processes are all primarily additive in nature, as materials are deposited only where needed, and thus results in significantly less materials wastage than traditional manufacturing techniques. Each of the technologies is suitable for use with a different range of materials, which in turn defines the suitable applications of the printer.Originally used for the rapid production of prototypes for form and fit testing, applications are transitioning towards also functional testing of prototypes under working conditions, and further, the manufacture of final products.With 3D printing designs are not constrained by manufacturing limitations and design complexity no longer adds cost. This opens up design avenues and enables the economic production of lighter components, critical to the aerospace and automotive industries. 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Optomec Reports 100% Year-Over-Year Revenue Growth Thanks to Innovative 3D Printing …

o2While the majority of the larger 3D printer manufacturers such as 3D Systems (which reports earnings tomorrow) and Stratasys have seen their growth rates stagnate over the last year, it’s not all bad news within the industry. In fact there are a handful of smaller companies that are growing at rates which may even surprise their own management teams.

Based out of Albuquerque, New Mexico, Optomec has been one of these companies that has excelled at all levels over the past twelve months. Known for their Aerosol Jet 3D printing system, which they were awarded a patent for early last year, the company has continued to push this technology forward, with future applications which could drastically change the way electronics are manufactured. The technology behind their system enables the printing of conductive elements on already manufactured substrates, allowing sensors, wear resistant coatings, and more to be fabricated rapidly on a provided object.

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Today the company announced record first-half revenue for the year which equates to 100% year-over-year gains, not to mention that they are now profitable from both an EBITDA and Net Income basis. Additionally they expect significant revenue growth over the remaining part of 2015 as they currently have a major backlog of orders.

“We are well on track to double sales this year, as well as improve overall profitability. We believe this strong performance validates our focus on commercial production applications, as well as our open systems approach that eases adoption of our solutions for industry,” said Dave Ramahi, Optomec CEO, who added: “We are also seeing some interesting opportunities to expand our solution portfolio, especially as it relates to sensor and antenna offerings for the Internet of Things.”

The majority of this growth can be attributed to Optomec’s additive manufacturing systems for high-volume production applications. Earlier this year the company sold numerous Aerosol Jet systems to an Asian manufacturer, which o3will use them for the production of next-generation mobile devices, while other orders have come from companies looking to print conformal sensors for ‘Internet of Things’ devices, as well as to print 3D conformal electronics on new wearable devices.

The company reports that during the second quarter of this year approximately 50% of sales came within their metal 3D printing unit, while the other 50% came from their 3D functional electronics offerings. While 40% of their sales came from within the United States, Optomec has shown growth within international markets as well, expanding their distribution channels in Mexico as well as in Europe.

While there is a lot of news as of late about the declining growth rates this year within the industry, Optomec certainly has bucked that trend and will likely continue down this rapid growth path for quite a while. Let us know your thoughts on the company’s stellar growth rate, and the future of their patented Aerosol Jet systems. Discuss in the Optomec Earnings forum thread on 3DPB.com.