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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.

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