Theme Theme Theme

Theme basket review: 3D Printing expands on good start to 2022

Equities 4 minutes to read
PG
Peter Garnry

Head of Equity Strategy

Summary:  The 3D Printing theme basket is one of the worst performing baskets over the past year, but this year 3D printing companies are feeling the love from investors with the basket up 2%. Based on our annual review of the theme basket we are expanding the basket from 16 to 21 companies which makes the basket more diversified and interesting. The industry is back into positive revenue growth but profitability is still lacking, but sell-side analysts are seeing through this remaining bullish on the industry.


Is the potential finally being released?

In July 2021, we launched our 3D Printing theme, or additive manufacturing as it is also called, and the key backdrop for the theme is the great potential for more efficient and lightweight manufacturing coupled with software simulations. But the industry has suffered from many false starts since it was commercialized back in the late 1980s.

This year’s performance is as of yesterday’s close +1-9% making our 3D Printing theme basket the fourth best performing basket. However, the past year has seen a 51.4% decline making it the third worst performing basket only surpassed by cannabis (-62.3%) and bubble stocks (-51.6%). The industry is optimistic on 2022, and the pandemic has probably a welcoming tailwind for the industry as global supply chain issues could accelerate more domestic production in the developed world which requires efficient and automated processes to be viable.

The smallest theme is growing up

It was our smallest theme when we launched containing only 16 companies. But in this year’s review we are adding six companies and removing one.

Added:

  • Renishaw
  • Xometry
  • Velo3D
  • Fathom Digital Manufacturing
  • Nano Dimension
  • Shapeways

Removed:

  • ExOne (acquired by Desktop Metal which is in the theme basket)

The net expansion means that the basket now has 21 stocks with a combined market value of $26.1bn, the smallest theme measured on market value up from $22.6bn when we launched the 3D Printing basket. Since July 2021, the median sales growth has improved from -13.3% to 7.3% as industrial demand has improved, but the overall industry is still not profitable with a median ROIC of -7.7%. Sell-side analysts covering the stocks are generally very positive with a 41% spread (median) from current prices to price targets.

NameMkt Cap (USD mn.)Sales growth (%)ROIC (%)Diff to PT (%)5yr return
Renishaw PLC4,86725.622.59.575.1
Allegheny Technologies Inc3,036-6.14.79.513.5
3D Systems Corp2,43516.4-3.824.611.2
Xometry Inc2,24176.3-48.942.0NA
Stratasys Ltd1,7248.2-7.765.823.9
Proto Labs Inc1,5366.55.26.0-6.3
Carpenter Technology Corp1,514-9.7-7.225.7-16.6
Velo3D Inc1,376NANA55.3NA
Desktop Metal Inc1,3131,121.2-38.2129.4NA
Materialise NV1,174-13.3-1.753.8131.9
Fathom Digital Manufacturing C1,143NANA40.7NA
FARO Technologies Inc1,0055.0-2.535.849.0
Nano Dimension Ltd97544.9-8.0155.1-94.3
SGL Carbon SE8704.4-8.536.7-24.2
SLM Solutions Group AG3968.8-16.368.2-59.6
Shapeways Holdings Inc179NA-3.9153.4NA
Prodways Group SA1672.6-4.140.8NA
Meatech 3D Ltd74NA-211.9NANA
voxeljet AG48NA-19.5113.2-56.4
Titomic Ltd36-1.1-96.0NANA
Amaero International Ltd35332.4-58.0NANA
Aggregate / median26,1437.3-7.741.42.5

Source: Bloomberg and Saxo Group

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