Why 3D Printing Stocks have tanked, and why that actually signals great news for the industry

A lot has been made in the press of 3D Printing stocks – most notably Stratasys and 3D Systems – over the last several years. First, they were darlings of Wall Street, reaching astronomical valuations buoyed by the seemingly unlimited potential of the technology, corresponding expectations for hyper growth, and their leading market positions. But something happened in the last year or so – the companies that had been grabbing headlines for their burgeoning market caps were getting those headlines for disappointing investors, missing earnings, and plummeting stock prices.

To an outsider, this might signal an ominous sign for the 3D Printing industry. Perhaps the technology has hit a wall – the hype was simply too big and the substance isn’t there to match it. Some have argued that the technology is passing through the fabled “trough of disillusionment,” when a public that had become enamored with a new technology’s potential comes to terms with the hard truth that its actual capabilities are a far cry from the headlines.

While there is cause to temper the most aggressive expectations somewhat – people will not eventually print everything at home, for instance (more on that in another post) – I would argue that these stocks tanking is a good sign, rather than a bad one, for the industry and technology as a whole. 3D Printing continues to retain the same promise it’s always had, and the advancements in the technology are rapid and encouraging. However, 3D Printing stocks have been getting hammered because those companies that are publicly traded are going through a genuine trough of disillusionment regarding their ability to corner this emerging market. They have suffered from some questionable acquisitions, pursuit of a consumer market that isn’t quite there yet, and a number of other factors that have given investors just cause to deflate valuations of those specific stocks.

But the industry marches on, and marches faster.  A few key facts to consider…

  1. Market growth was enormous last year, outpacing consensus expectations. According to Wohlers and Associates’ annual report, the global 3D Printing market revenues – defined as the combination of printers, feedstocks, and services – grew from $3.1B in to $4.2B in 2014. That’s a 35% growth rate, outpacing virtually every industry analyst’s expectation. Major printing stocks couldn’t keep pace with that industry growth – last quarter, DDD was up 8.8% over the same period last year, and SSYS was similarly up 14.4%.  Not bad, but not 35%.
  2. New innovations are introduced to the market on a seemingly weekly basis. Take the eight day span from March 17-25 for instance, when not one, but two companies – Carbon 3D and Australia’s Gizmo3D – publicized videos with prototype printers executing stereolithography-esque printing at speeds of 25x-100x what the market currently offers. Just a few months prior, HP officially announced its intention to become a major player in the market, with plans to introduce its MultiJet Fusion technology to the market before the end of 2016. And a few months later, Cosine Additive showed at RAPID with a large form FDM printer to compete with Stratasys’ Fortus 900mc.
  3. Metal printing is exploding. EOS, Arcam AB, Concept Laser, SLM Solutions – all are signaling significant growth to the market. Take Arcam AB (the only publicly traded metal printer manufacturer of the bunch), for instance, which reported healthy growth and earnings in 2015 with a 105% increase in sales and 208% increase in earnings per share.  Its stock price has also slid in the last year, but one might argue that’s a case of presumed guilt by association with other 3D Printing stocks.
  4. Businesses that have invested in industrial grade equipment are busy and investing in new equipment. Since our company, 3Diligent, is in the business of connecting supply with demand for on-demand rapidly manufactured parts, I can attest to this from firsthand meetings with 3D Printing service providers and corporations.   Quality service providers are busy and continuing to expand their industrial machine base.  Seemingly every company has “Develop a strategy for 3D Printing” in its leadership directives.  The demand is growing and the supply is growing to match it – in some cases, it’s backlogged.  Incorporating additive manufacturing into product design and inventory management activities is simply too disruptive and potentially beneficial to ignore.  And that isn’t to even consider the larger mass manufacturing implications for 3D Printing when a broader swath of designers understand how to optimize next generation designs for the technology.

So it’s important not to conflate disappointing performance by a few publicly traded companies with broader industry performance and prospects. Stratasys and 3D Systems continue to manufacture some of the industry’s most reliable and fully featured printers – particularly when it comes to plastics and resins. It’s just that Wall Street is coming to realize, among other things, that innovation with a technology this revolutionary is going to come from many places, and no two companies are going to be able to corner all of the market’s growth.

All things considered, this is great news for anyone hoping 3D Printing will guide us through another Industrial Revolution. Competition breeds faster innovation, better products, and more competitive pricing.  So don’t lose heart that a few stocks have taken it on the chin the last few quarters – the future of 3D printing is very bright indeed…

 

Cullen Hilkene is CEO of 3Diligent, the Sourcing Solution for Industrial Grade Rapid Manufacturing. He is an alumnus of Princeton University, the UCLA Anderson School of Management, and Deloitte Strategy and Operations Consulting. For more information about 3D Printing and to access 3Diligent’s marketplace of 3D Printing vendors, visit www.3Diligent.com.

 

Hello New York!

Pretty awesome to see news of 3Diligent’s launch popping up in Times Square!

One month after launch, news of 3Diligent appeared on the PR Newswire feed in Times Square.  Needless to say, buzz about our offering is growing!

We are excited to help our customers and vendors on their 3D printing and rapid manufacturing needs.  Through our platform we connect customers with top quality vendors and facilitate the communication, bidding, and transaction processes creating a win-win situation for both parties.

So if you are a business looking for suppliers in the 3D printing space, we are your sourcing solution.  On our platform, access the capabilities of many vendors in real time, saving yourself loads of time and money.

If you are a service provider who has invested in next generation technologies and looking to maximize your machines’ utilization, we are your solution as well.  Via our algorithmic matching of customer RFQ to vendor capabilities, you’re hand delivered RFQs that you’re well positioned to support.

Customers, sign up today from the 3Diligent.com home page and gain access to the most powerful sourcing tool in the 3D Printing industry for free.  Getting competitive bids from qualified vendors has never been easier.  Vendors, contact us to start the qualification process to become a vendor today.  It’s also free to join.


Let us help your business Source Smarter. Visit www.3Diligent.com to learn more about us and sign up for free.  Any questions? Drop us a note in the comment section. 

3Diligent Raises Nearly $1M in Seed Round

Well the word is out: we’ve raised a nearly $1M seed round and launched our web portal, www.3Diligent.com.  We are thankful to have a fantastic set of investors and look forward to enhancing the user experience on the 3Diligent web portal for our customers and vendors!  Further thanks to the good folks at 3DPrint.com for a great writeup.

With this funding in hand, we’ve been put in a position to launch 3Diligent.com, invest in ongoing development, and spread the word about this fantastic resource for anyone seeking use of advanced manufacturing.

3Diligent is the sourcing solution for industrial rapid manufacturing.  We connect customers who need 3D printing, CNC machining, casting, molding and other rapid manufacturing technologies with qualified vendors to perform their job on time and to spec.

Our platform gives customers seamless access to multiple vendors with expertise in a wide arrange of rapid manufacturing technologies.  Customers submit an RFQ, the right set of vendors to complete the job are identified, and those vendors competitively bid on the project opportunity.  Customers are given the ability to directly converse with vendors via the platform to refine their request and arrive at the ideal service provider for their job.

Meanwhile, the platform gives our vendors access to more customers and the opportunity to utilize excess capacity.  Vendors with excess or idle capacity can offer competitive bids to get the most out of their machines.  This ability is bolstered by 3Diligent’s “veiled bidding” concept: customers and vendors are provided all the information they need before consummating a transaction (certifications, ratings, reviews, etc.), but their names are left out of it until the deal is reached.  This allows vendors to comfortably offer below market prices when they have the ability to do so.

Every vendor goes through 3Diligent’s qualification process before joining the platform and vendors are rated and reviewed by customers to ensure quality.  Further, every transaction on the platform is backed by a 100% satisfaction guarantee.  If your parts are not delivered to you on time and to spec, you will be given the option of your money back.

Thanks again to our investors!  We are very excited to bring the business community more efficient and affordable access to amazing rapid manufacturing technology with their backing!


Let us help your business source smarter. Sign up for free at www.3Diligent.com/signup to learn more about us and start taking advantage of our platform. Any questions? Drop us a note in the comment section. 

3Diligent: The Sourcing Solution for Industrial Grade Rapid Manufacturing

Instant Access to the Latest and Greatest 3D Printing, CNC Machining, and More…

3D Printing is an incredible technology.  But it’s expensive.  If you want to access the latest technologies but don’t want to fork over a small fortune for a machine or waste tons of time hunting down vendors, only to find they don’t have your desired material, process, or reasonable pricing, 3Diligent is for you.  

The 3DP Story

3D Printing is a game changer.  And we want to help your business access the best of it faster and for less.

Article after article says it, from The Economist to Forbes to Business Insider.  There is no denying that additive manufacturing (the more technical name for 3D printing) is fundamentally changing the way things are made.

But it’s somewhat remarkable to think that this is a technology that – at it’s heart – has been around for more than three decades.  A number of things have held this technology back from adoption – patent protections, speed concerns, size limitations – but quality and cost have generally been established as the biggest recent issues.

Recent Developments

Recent years have been kind to 3D printing on the quality front.  Material science has improved massively – with aerospace grade plastics and metals arriving in the market.  Production accuracy has similarly improved, with accuracy from industrial printers capable of meeting or exceeding +/- .005″.  Case in point, GE is manufacturing all of its next generation LEAP jet fuel nozzles by way of additive manufacturing.

There have been strides on the cost front, but cheap the technology is not.  Certain patents expiring on early technologies like Stereolithography (SLA) and Fused Deposition Modeling (FDM) and community efforts like the Rep Rap Project gave rise to desktop printers like the Makerbot Replicator and Form One.  These personal printers could be offered for a few thousand dollars – relative peanuts compared to industrial printers.   But those industrial printers – the ones achieving the quality and certifications that I mentioned earlier – still carry price tags in the hundreds of thousands or even millions of dollars.  If you want to access this incredible professional and production-grade technology to achieve something better than a basic prototype, what do you do?

The Printer’s Dilemma

Buy a printer?  Not a chance…not with that price tag and related obsolescence risks!  By the time you hired and trained staff internally, it’s a safe bet the printer you bought has been surpassed by a slew of faster, better models.

Lease a printer?  The residual values built into leases after just a couple years make it almost the same as buying a printer without the capital asset.

Outsource to a service provider?  This makes the most sense for all but the biggest companies.  And even for mega corporations, it still makes sense to outsource some production that isn’t viable in-house – whether as overflow or for less commonly used materials and/or processes.  The trouble is, utilizing a service bureau, or even a few, has its own issues.  Service bureaus face the same concerns as their customers – trying to win the race against obsolescence by keeping machines running all the time, with full build trays, and striving to stock the right amount of material to perfectly match demand.  Since every vendor takes a different approach to recouping investment – and since no vendor is perfect at inventory management – pricing can be highly variable from one service provider to the next – sometimes 10x.  Further, since no provider carries all the technologies in the market, let alone all the available material-process combinations, even a handful of select service providers are not enough.

And that’s describing the challenge of how to go about 3D printing.  We haven’t even touched on the separate analysis of when to use 3D Printing, and the fact that it isn’t always the best option relative to CNC Machining, Molding, Casting, and a handful of other rapid manufacturing techniques.  How does a company not only access 3D Printing efficiently and affordably, but also know that they’re deploying the most cost effective technology for the particular job at hand?

The 3D Print Sourcing Solution

That’s where 3Diligent comes in.

3Diligent has networked independent service providers who have invested in the industrial grade rapid manufacturing technologies we’re talking about.  When customers submit an RFQ through our secure platform, our algorithm identifies the vendors equipped to bid on the job, then facilitates messaging and transactions between the interested parties.

So you’re not limited by a single provider’s material or process constraints.  You’re not limited by the backlog they may have.  You’re accessing the available capacity of the market.  And doing so not only provides more seamless and efficient access to the capability you seek, but also allows you to take advantage of serendipity.  If one vendor has excess capacity, or they have a scheduled run that your job could slide nicely alongside, you’re able to identify that vendor and take advantage of circumstances that may allow you below market pricing.

Savings of time.  Savings of money.  In sum, the ability to efficiently and effectively the best in 3D Printed metal, plastic, and more.  3Diligent.  More on our sourcing solution in posts to come.