Why Consider Investing in 3D Printing Companies?

Most people are familiar with the saying “technology is the future,” and developments in the tech space are rapidly revolutionizing the world. That’s why so many people are considering investing in 3D printing companies.

3D printing, also known as additive manufacturing, entered the scene in the 1980s. At that time, it was mostly used for industrial manufacturing, but it has since evolved and spread into different areas — even the medical space.

A variety of materials can now be used in 3D printing, including plastic, wood, metal, nylon and hundreds of other materials like human cells. While there are many different 3D printer types, all create 3D objects by building layer by layer until the entire object is complete.

Various companies have been using 3D printing technology to design prototypes and even print their own parts, cutting down costs and saving on the time it would take for the products to be made elsewhere. 3D printers are also becoming increasingly common in homes as hobbyists and inventors look to bring their designs to life.

Stratasys (NASDAQ:SSYS) is one company that sells a variety of 3D printing equipment and materials, providing innovative options for a plethora of industries, including aerospace, architecture, dental, medical and education.

With that in mind, here the Investing News Network (INN) takes a look at why you–yes, you–might want to consider investing in 3D printing companies and an overview of the industry’s future outlook.

Investing in 3D printing companies: Stocks 

For years people have been skeptical about 3D printers, likely because only a handful of noteworthy companies were producing them. However, that has changed in recent years, with the technology moving into “mainstream” status, according to Gartner analysts.

In particular, the introduction of 3D printers to the medical space has drawn attention to the technology’s life-changing potential. Some breakthroughs include saving the lives of children with pediatric tracheobronchomalacia, a disease in which the windpipe is softened, leading to airway collapse and causing breathing failure. 3D printers are used to create flexible, custom airway splints for babies, a development that came out of the CS Mott Children’s Hospital in Michigan.

Other 3D printing advancements include the development of a new method to 3D print shape-shifting objects, the evolution in foot orthotics, and even innovations in allowing sizeable pieces of furniture “to be printed in minutes.”

In terms of actual companies, there’s a wide range for investors to consider, including:

• 3D Systems (NYSE:DDD) which developed its stereolithography printer in 1989, is one company that offers “healthcare-centric 3D printing and 3D visualization technology.” That includes surgical tools, systems that assist in training medical staff and virtual surgical planning.
• Organovo (NYSEMKT:ONVO) specializes in bioprinting, otherwise known as printing human tissue, and whose products include the exVive 3D human liver tissue and 3D human tissue for medical research and therapeutics.
• Proto Labs (NYSE:PRLB) uses rapid prototyping in stereolithography, selective laser sintering and direct metal laser sintering.
• NanoDimension (NASDAQ:NNDM) which focuses on the research and development of advanced 3d printed electronics and the development of nanotechnology-based inks that can be used in products for 3D printers.
• Graphene 3D Lab (TSXV:GGG) takes graphene-based composites and uses them for circuitry and functional components, including batteries. They are the only pure play Canadian company in the graphene sphere.
• Tinkerine Studios (TSXV:TTD) has a focus on 3d printing technologies and education, whose products include: DittoPro, Tinkerine Suite, Tinkerine Filament, and Tinkerine U.

Investing in 3d printing companies: Market outlook

The potential of 3D printing, particularly in the medical space, makes it clear why many people are considering investing in 3D printing companies.

According to research firm International Data Corporation (IDC), global spending on 3D printing will reach US$23 billion by 2022, growing at a compound annual growth rate (CAGR) of 18.4 percent between the forecast period 2018 to 2022. By 2019, IDC projects global spending on the sector will reach US$14 billion, which would translate to an increase of 23.2 percent from 2018.

“3D printing solutions are gaining traction outside of the traditional industries of aerospace and automotive manufacturing and healthcare,” Marianne Daquila, research manager at IDC, said in a release. “Professional services and retail will each see more than $1 billion dollars in annual spending before the end of the forecast period, driven by the benefits of fully customized solutions.”

On the materials, software and services side, IDTechEx forecasts that the global market would be worth US$22 billion by 2028. The firm said that “there remains enormous potential for growth over the next decade.”

Meanwhile, CB Insights has published a list of industries where 3D printing is set to make an impact with the top five being architecture and construction, education, food, prosthetics and pharmaceutical drugs.

In terms of the forecasts for these sectors, Research and Markets said that invesglobal 3D concrete printing will grow at an estimated CAGR of 317.3 percent from US$1.2 million to US$1.48 billion by 2023. The firm in a separate report said that the global 3D food printing market is projected to reach US$525.6 million by 2023.

Looking at education, Technavio in its report said that the global 3D printing sector in this space will reach US$2.18 billion by 2022 and growing at a CAGR of 20 percent.

3D printing in the healthcare industry, according to Global Market Insights, is set to exceed US$2.2 billion by 2024.

Indeed, it’s clear that the 3D printing industry is well positioned to be on solid footing for many years to come. As the market evolves, so will the companies in it, making it an exciting space for investors to consider for their portfolios

This is an updated version of an article first published by the Investing News Network in 2015. 

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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.