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Stock Strategist Industry Reports

Outlook Dims for 3D Printer Makers

We think 3D Systems and Stratasys are both fairly valued.

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After reviewing our outlook for  3D Systems (DDD) and  Stratasys (SSYS), we are maintaining our no-moat ratings, lowering our fair value estimates, and downgrading Stratasys’ stewardship rating to poor. Our fair value estimate for 3D Systems drops to $11 per share from $14, while for Stratasys it drops to $20 per share from $24.

Today’s 3D printing market is characterized by intense competition, low barriers to entry, and rapid development cycles. Since 2014, both manufacturers have struggled to register economic profits as a dearth of new supply across the 3D printing value chain handcuffed supplier pricing power. According to Wohlers Associates, 135 companies sold industrial additive manufacturing systems (units priced above $5,000) globally in 2017, compared with 97 companies in 2016 and 62 in 2015.

Danny Goode does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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