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What can we learn from the past about the future of AM?

Updated: Sep 13, 2023


What would be the best way to summarize the past decade in the 3D printing industry? We can analyze the industry's growth over the years, the influx of companies entering the market, the diverse range of software, hardware, and material solutions that have been developed, the integration of additive technologies across various industries, the global sales figures for 3D printers, and much more.


I would like to present an alternative perspective that involves assessing the dissonance between expectations and reality by examining the trajectory of 3D printing stocks. To delve into this approach, we can take the example of 3D Systems, a trailblazer in the development and provision of 3D printing solutions. Having been a publicly-traded entity since 1988, it offers a pertinent reference point.


Upon scrutinizing the stock's performance over the past decade, three distinct trends come to light: the Industrial Revolution frenzy, the impact of the Covid-19 pandemic, and the more recent wave of mergers and acquisitions.


1 - The Industrial Revolution

Image source - Yahoo finance


The boom in 3D printing stocks from 2012 to 2014 can be attributed to a combination of technological advancements, increased media attention, and high investor enthusiasm for the potential of 3D printing technology to revolutionize manufacturing and various industries. Several key factors contributed to this boom:


Technological innovation - The years leading up to 2012 saw significant advancements in 3D printing technology. Companies were making strides in improving the quality, speed, and capabilities of 3D printers. This sparked optimism about the technology's potential to disrupt traditional manufacturing processes.


Media coverage - 3D printing gained a lot of media coverage during this period, which helped to build public awareness and investor interest. News articles, TV segments, and online discussions highlighted the possibilities of 3D printing, ranging from manufacturing customized products to medical applications like creating prosthetics and implants.


Investor enthusiasm and speculation - As media coverage and awareness increased, investors became more interested in getting in on the ground floor of what was seen as a revolutionary technology. This enthusiasm led to a speculative investment boom, with investors pouring money into 3D printing stocks in the hope of significant future returns

The hype around 3D printing stocks eventually led to an unsustainable bubble. By the latter half of 2014, some of the initial excitement began to fade as investors realized that the technology's widespread adoption and its impact on industries would likely take longer to materialize than initially anticipated.


The roller-coaster journey of 3D Systems' stock, surging from $10 to a pinnacle of $96 within two years and subsequently plummeting back to $10 per share, served as a vivid manifestation of this comprehension.


2 - The Covid-19 Pandemic

Image source - Yahoo finance


3D printing stocks experienced a surge during the COVID-19 pandemic due to several factors that highlighted the technology's agility and versatility in addressing critical challenges brought about by the global health crisis. These factors contributed to the boom in 3D printing stocks:


Supply chain disruptions: Traditional supply chains faced disruptions as borders closed and transportation became more challenging during lockdowns. 3D printing offered a decentralized manufacturing solution, allowing companies to produce essential medical supplies and components locally, thereby mitigating supply chain disruptions.


Urgent need for medical supplies: The pandemic created a sudden and urgent demand for medical equipment like personal protective equipment (PPE), ventilator components, and testing swabs. 3D printing allowed for rapid prototyping and production of these items, enabling a quicker response to healthcare needs.


Public awareness and investment: The pandemic raised public awareness about the capabilities of 3D printing, drawing attention to its potential beyond traditional manufacturing. Investors recognized the value of 3D printing companies that could quickly adapt to pandemic-related demands.


While 3D printing stocks experienced a surge during the pandemic, the boom was partially tied to the immediate and unique circumstances of COVID-19. As the pandemic's impact lessened and supply chains began to recover, the rapid growth in 3D printing stocks also normalized.


Crucially, within this period of heightened enthusiasm, numerous 3D printing firms leveraged the inflated valuations of publicly traded enterprises to effectively secure funds or achieve public listing via SPAC mergers. Noteworthy among these companies are Markforged, Desktop Metal, Nano Dimensions, Fathom Digital Manufacturing, Velo3D, Massivit, and several others.


3 - Mergers and Acquisitions

Image source - Yahoo finance


While mergers and acquisitions have a history in the industry, they have regained momentum, particularly following Nano Dimension's proposition to acquire Stratasys in March of this year. Subsequently, conjecture surrounding Stratasys and other publicly-traded 3D printing firms led to increased stock values. However, up to the present day, none of these speculations have materialized into definitive agreements.


Why has the resurgence of Mergers and Acquisitions come to the forefront once again? The primary driving force is as follows:

Growth StagnationOver the past 5-7 years, leading 3D printing companies encountered a glass ceiling in their pursuit of expanding market share and boosting sales. Despite the industry's sustained annual growth of approximately 25%, this growth is distributed among 10-15 major corporations, a few dozen mid-sized enterprises, and a multitude of small startups. While each player claims a slice of the pie, substantial growth remains elusive for all. As a result, M&A has emerged as the most potent strategy for prominent firms to outpace competitors and amplify their market foothold. As of the present moment, the recent surge in M&A activity remains speculative, with no finalized deals thus far. The stock values of the involved companies have receded to their prior levels, and the ongoing speculation regarding potential acquirers and mergers persists. It's reasonable to anticipate that the initial excitement will evolve into a more protracted phase of consolidation.


The Next Decade

The overarching conclusion drawn from these three waves of hype is that the present valuation of publicly-traded 3D printing companies finds itself at a sensible equilibrium. The market capitalization of prominent entities like 3D Systems, Markforged, Desktop Metal, Stratasys and others resides within the range of $250 million to $1.5 billion.

This indicates that investors today exhibit a heightened sense of realism. While acknowledging the projected growth of the Additive Manufacturing sector over the upcoming decade, they also recognize the gradual pace of additive technology adoption, particularly within manufacturing processes. This shift signals the potential end of the era characterized by 3D printing stocks surging on pure speculation or startups securing funds at elevated valuations, at least for the foreseeable future.

A forward-looking perspective anticipates the sustained consolidation within the industry, propelling its continued expansion. Once the internal consolidation through M&A is fully realized—a process spanning 2-4 years—larger corporations currently not engaged in this sector might discern that the time is ripe for them to acquire a leading player, subsequently propelling the industry to its next evolutionary phase.

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