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Why you Should Dump 3D Printing Stocks

May 09, 2014 | About:

The hype surrounding the 3D printing industry is huge, with many analysts claiming that this technology will grow into the next-generation technology for industrial manufacturing and production. I, for one, don't believe that this hype is justified and I remain highly skeptical of 3D printing's future.

There are numerous companies that are involved in this industry, which makes growth for any single company even more difficult. In addition, the arrival of new companies like Voxeljet (NYSE: VJET) will intensify competition further. 3D Systems (NYSE: DDD), due to its diversified product portfolio and wide distribution network, is often projected to become the leader of this industry.

However, I don't see it happening because of a few reasons. Which is why I think investors should short the likes of 3D Systems, Stratasys (NASDAQ: SSYS), Voxeljet, and ExOne (NASDAQ: XONE). Let's take a look at the reasons why

3 Risks to the 3D industry

1. Time consumption and efficiency

3D printing consumes a large amount of time for printing a product. The process of 3D printing can last from a few hours to a few days. Hence, 3D printing does not stand a chance against industrial machines that can produce thousands of products every hour. In addition to that, industrial machines produce fully finished products that can be directly loaded onto a truck, while the 3D printing process lacks this feature. The 3D printing procedure would require an extra step of removing the printed product from the printer, and casing it before it can be shipped. This, evidently, will increase the lead time and capital consumption.

The time consumption can be reduced considerably by stacking multiple printers together, but it will be unpractical primarily because of a few reasons like:

  • 3-D printers are expensive; therefore buying multiple printers will not be feasible.
  • High space and power requirements.
  • Individually providing all the printers with the raw materials and collecting the finished product from each of the printers and then assembling it will consume a lot of time.

To match the production rate of an industrial machine, a company will have to deploy hundreds and thousands of 3D printers, which as I said, is not feasible.

2. Strength and material

The strength of the finished product is another issue which comes with this technology. Since this technology uses layering techniques, the printed product will not be as strong as the conventionally manufactured product.

Also, a 3D printer usually prints in plastic; therefore it will not find its use everywhere. Most of the things we use today are made from a blend of different materials, so this will restrict the utilization of a 3D printer.

3. Extremely high cost

A 3D printer is very expensive and on top of that, the material used in printing is not cheap. A traditional industrial manufacturing machine may cost more than a 3D printer, but these machines make up for it by producing finished products at a much higher rate than the 3D printer.

These are the few reasons why I believe that 3D printing companies might not be able to live up to its present hype.


The 3D printing industry faces many challenges going forward. Although the stocks have fallen considerably from all-time highs, I think there's still room to short them. Thus, I am reiterating my short calls of the four stocks mentioned above.

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Hansen.harlley - 1 year ago

3D Systems currently is trading at a premium of around 38% in terms of the forward one-year P/E multiple

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