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The Best 3D Printing Stock to Buy Source: Carbon3D. Source: Stratasys.

The Best 3DP Printing Stock to Buy

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Page 1: The Best 3DP Printing Stock to Buy

The Best 3D Printing Stock to Buy

Source: Carbon3D.Source: Stratasys.

Page 2: The Best 3DP Printing Stock to Buy

The Best 3D Printing Stock to BuyThe 6 Pure-Play Candidates:Company Market Cap Business / Market FocusStratasys $1.0 billion 3D printers and printing services; consumer,

commercial, and industrial focus.

3D Systems $838 million Same as above except no longer consumer.

Materialise $298 million 3D printing software and services; broad focus.

Arcam $400 million 3D printers and printing services; industrial.

Voxeljet $77 million 3D printers and printing services; commercial and industrial.

ExOne $128 million 3D printers and printing services; industrial.

Page 3: The Best 3DP Printing Stock to Buy

The Best 3D Printing Stock to Buy

• Has failed to execute for at least seven quarters.• Growth-by-acquisition strategies are difficult to pull off well.• Has not demonstrated it can innovate. • Is heavily dependent upon polymer capabilities. Thus, is quite

vulnerable to competition from Hewlett-Packard and Carbon3D.

Kicking Out: 3D Systems

Page 4: The Best 3DP Printing Stock to Buy

The Best 3D Printing Stock to Buy

• Has executed poorly since Q4 2014.• The MakerBot implosion (big drop in revenue; huge goodwill

writedown) will likely have long-lasting negative effects on overall numbers.

• Is heavily dependent upon polymer capabilities. Thus, is quite vulnerable to competition from HP and Carbon3D.

Kicking Out: Stratasys

Page 5: The Best 3DP Printing Stock to Buy

The Best 3D Printing Stock to Buy

• Has failed to execute since its Feb. 2013 IPO – has failed to meet its annual revenue guidance, and other key metrics, such as gross margin.

• Its cash burn rate is concerning: At the end of the last quarter (Q3 2015), it had $20.3 million in cash, while its operating cash flow for the trailing 12 months was a negative $15.3 million.

Kicking Out: ExOne

Page 6: The Best 3DP Printing Stock to Buy

The Best 3D Printing Stock to Buy

• Has yet to prove there’s notable demand for its 3D printers: It sold just 2 (and small ones, to boot) in the third-quarter 2015.

• Positively, however, backlog for printers has increased – 10 printers at the end of Q3 2015 vs. 7 at the end of Q3 2014.

• Is considerably dependent upon polymer capabilities. Thus, is vulnerable to competition from HP and Carbon3D.

Kicking Out: Voxeljet

Page 7: The Best 3DP Printing Stock to Buy

The Best 3D Printing Stock to Buy

• Has limited track record as a public company (IPO mid-2014), so best to wait a bit to better gauge its competitiveness.

• Worth watching: Has respected CEO; makes software that works with all types of 3D printers; and was one of only three companies (along with 3D Systems and Arcam) that showed a positive operating cash flow over the trailing 12 months.

Kicking Out: Materialise

Page 8: The Best 3DP Printing Stock to Buy

The Best 3D Printing Stock to Buy

• Plans to enter the market in 2016 with an enterprise 3D printer based on its Multi Jet Fusion tech.

• Printer will reportedly be 10 times faster than those powered by the leading 3D printing techs, without sacrificing precision, resolution, or color capabilities.

• Printer will initially just have polymer capabilities.

Hewlett-Packard’s Potential Threat

Page 9: The Best 3DP Printing Stock to Buy

The Best 3D Printing Stock to Buy

• Plans to enter the market in 2016 with an enterprise 3D printer based on its Continuous Liquid Interface Production tech.

• Printer will reportedly be 25 to 100 times faster than those powered by the leading 3D printing techs.

• Printer will have a broad range of polymer capabilities.• Google Ventures just led a $100 million funding round. Autodesk

is another backer. Former Ford CEO Alan Mulally is on board.

Carbon3D’s Potential Threat

Page 10: The Best 3DP Printing Stock to Buy

The Best 3D Printing Stock to Buy

• Management continues to execute well. • The only pure-play 3D printing stock that’s currently profitable

on a GAAP basis for the trailing-12-month period. • Its electron beam melting (EBM) tech is patented. • An industrials-metals pure play. So, should not be negatively

affected when HP and Carbon3D enter the market.

The best 3D printing stock is … Arcam

Page 11: The Best 3DP Printing Stock to Buy

The Best 3D Printing Stock to Buy

• In fact, Arcam is the only 3D printing stock I ever owned, though I no longer own it.

• I have other priorities, which precludes buying stock at this time.

• Arcam remains my favorite pure-play 3D printing stock, though I also like Proto Labs.

Why isn’t my money where my mouth is?

Page 12: The Best 3DP Printing Stock to Buy

The Best 3D Printing Stock to Buy

• Stock is very thinly traded (it’s listed in the Nasdaq OMX Stockholm, but trades over the counter in the U.S.), which means it can be very volatile.

• It has one technology (EBM). So, all its eggs are in one basket.• It’s now pricey on a P/E basis (87); the P/E was only in the mid-

30s when the original article was published (9/15).

Cautions about Arcam