3D printing firms layer on profits Achieving growth the technology sector has become increasingly harder to deliver. We ask whether 3-D printing firms can finally live up to the hype.

3D printing firms have some of the best revenue growth among their computing peers

Stratasys and 3D Systems have both seen short sellers cover positions as the shares surge

Investors have piled into the newly launched Robotics and Automation ETF

This year’s CES gathering in Vegas comes at a

time when the industry is desperately seeking

new sources of growth to make up for lost

revenue stemming from slowing smartphone

adoption.

The Consumer Electronic Association, which runs

the CES, is forecasting a 1% fall in technology

revenues for the coming year which represents a

$14bn drop on last year’s revenue.

We ask whether 3D printing, long touted as the

next big thing, can satiate some of the growth

appetite so desperately needed in today’s tech

world.

3D firms growing revenue

The two 3D printing firms represented in the

Markit US Total Cap universe have been able to

grow revenues at a faster pace than their

computer hardware peers over the last year

according to Markit Data Analytics and Research.

Stratasys and 3D Systems Corp rank better than

the rest of their computer hardware peers in the ‘1

year change in sales’ factor, which ranks

companies on the change in sales in their latest

reported quarter over the same period over the

previous four quarters.

The firms rank 14 and 28 in the factor on a scale

of 1 to 100, against an average rank of 50 across

their peers.

In comparison, industry giant Hewlett Packard

ranks worse than the industry average at 64,

having reported lower revenues than Q4 2012.

Perhaps most importantly, revenue growth has

not come at the expense of profits for 3D and

Stratasys, which were able to steadily grow profits

over the past year.

Short covering

The revenue growth has proven the sceptics

wrong as both firms, which were among the most

shorted in the tech world, have seen steady short

covering over the last 12 months.

Leading the short covering is Stratasys which is

unveiling its latest iteration of MakerBot at this

year’s CES show along with a digital store hailed

by some as the “iTunes of 3D printing”.

Demand to borrow has fallen by two thirds over

the last 12 months to less than 3%. The company,

which is expected to grow revenues by more than

30% for 2013 has seen its shares surge by more

than 60% over this timeframe.

Markit Equities Research

January 8th 2014

Markit Equities Research

3D Systems has also seen shorts cover by a third

over this time. Despite this fall in demand to

borrow, there are still plenty of shorts in this stock

with 15% of shares outstanding out on loan. 3D

has been an expensive short over the last year as

its shares have surged by 160%.

Newly listed ExOne and Voxeljet have also seen

shorts retreat in the face of large share price

increases.

Strong ETP Appetite

ETP investors have been clamouring for a piece

of the 3D printing action with the newly launched

Robo-Stox Global Robotics and Automation Etf.

The fund, which invests in several 3D printing

companies, has managed to attract over $55m of

assets since its inception in October of last year.

Simon Colvin

Analyst

Markit

Tel: +44 207 260 7614

Email: simon.colvin@markit.com

For further information, please visit www.markit.com