Once again we take a look at the valuations of the major 3D printing companies over the past week.
Publicly traded companies are required to post their financial reports, as well as appear on stock markets. From there we can calculate the total value of their company by multiplying the current stock price by the number of outstanding shares. This number is the market capitalization, and represents the current valuation of the company.
It’s a great number of compare companies, as the market capitalization can be leveraged to provide more capabilities for the company. Shares could, for example, be used as collateral for a loan. That and similar maneuvers could generate cash with which the company might undertake new projects.
In other words, “market cap”, as it is known, is quite important.
You might think it’s not important to monitor these companies each week, as their value is realized only when stocks are sold. However, events happen to companies occasionally that cause their value to rise and fall, and this weekly post is where we track such things.
Note that our list here does not include all major 3D print companies. Not all 3D print companies are publicly traded, and thus we cannot officially know their true size, such as EOS. Others, like HP or Siemens, have very large 3D printing divisions, but are part a much larger enterprises and we cannot know the true size of their 3D printing activities.
Let’s take a look at the 3D printing companies on this week’s list.
3D Printing Leaderboard
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This week saw pretty decent results, with the leaderboard rising a healthy seven percent overall. This falls into the standard pattern where the leaderboard valuations tend to exaggerate general market trends. This week the markets rose two to three percent, so a seven point gain in our niche is not at all unexpected.
Of course, some companies on the leaderboard differed from this pattern, and that’s what we’re going to look at today.
FATHOM, the growing manufacturing service that extensively uses 3D printing, suffered a steep decline in their valuation this week of nearly 18%. This was certainly a result of their March 31st release of annual financials, which corresponded with the majority of the week’s drop.
In their financials it was seen their 2022 revenue very slightly exceeded their 2021 revenue, which is not a great signal: companies in this space should be growing strongly, and a mere six percent gain would be seen as insufficient. Worse, their net income went from slightly positive to significantly negative, as they posted a US$1.1M loss for the year. Evidently investors didn’t take kindly to these results and FATHOM’s valuation was adjusted accordingly.
Another company dropping notably this week was Shapeways, the well-known 3D print service. Their valuation curve this week was pretty much the same as FATHOM’s: a huge drop on Friday, the day they released their 2022 annual financials. As a result, they finished the week with a 16% loss in value.
In their financial results, it seems their 2022 revenue was very slightly down over 2021, and their gross profit was actually down. A negative statistic was their gross margin, which dropped from 47% in 2021 to 43% in 2022. Even worse, however, was their net loss for the year, US$20.2M, compared to a modest profit of US$1.8M in 2021.
For a company in a rapidly growing space, it is understandable that investors would not be pleased with these results and their valuation dropped this week.
I should note that tech companies are typically valued on their growth potential: they would be highly priced today because it is thought that they will grow exponentially in the future. However, if there’s little growth that confidence rapidly dissipates and the company’s value typically plummets. In this case, Shapeways is down a whopping 97% (yes, ninety-seven percent) from their peak back in October 2021, mostly due to lack of growth.
Then there’s the ongoing saga of Nano Dimension and Stratasys. As you may have read, Nano Dimension has launched a takeover bid for Stratasys, much to the consternation of Nano Dimension’s shareholders. The shareholders believe the company’s vast cash hoard of US$1.1B should be returned to shareholders, while company management wants to spend it all on acquisitions.
They’ve now made two offers to Stratasys management, the second being slightly higher and basically using up all of Nano Dimension’s free cash. The first was politely (and unanimously) rejected by Stratasys, while a slightly higher second offer is still under consideration by Stratasys. It’s quite likely the second offer will be similarly rejected; it’s just not big enough, in spite of Nano Dimension’s highly unusual daily videos that hope to persuade everyone that this is a good move.
As this corporate turmoil unfolds, it does affect the valuations of both companies. Generally, Stratasys’ value has been rising, while Nano Dimension’s has been falling.
This week saw Stratasys gain nearly 15% in value, cementing their spot in second position on the leaderboard. Some of the gain could be due to Nano Dimension’s slightly increased offer, but I believe more might be due to Stratasys’ announcement of a massive sale of their new H350 manufacturing systems to a client, demonstrating the potential of this system for large-scale manufacturing. With the prospect of many more sales of this gear, investors likely see Stratasys gaining in value.
Meanwhile, Nano Dimension actually rose in value this week, a little over eleven percent. Their financial results were also announced, and there were several positive signs within, including a whopping increase in revenues of 316% over 2021, and increased margins from 11% to 36%.
That’s good, and no doubt why the company’s valuation rose this week. However, there is more to this than meets the eye. A considerable portion of the changes in revenue and margins are certainly due to the company’s acquisitions of Admatec, Essemtec and others. The revenue and margins from these companies could be driving the positive numbers.
However, after adding in taxes, R&D expenses, and more, Nano Dimension finished 2022 with a whopping net loss of US$227M, larger than the value of half of the companies on the leaderboard. That is a truly huge number.
The company has US$1.1B in cash reserves, which should easily be able to withstand this type of loss for several years while they move to profitability. What concerns me greatly, however, is that they’ve just offered to spend the vast majority of that cash reserve on the proposed Stratasys acquisition. If they complete the deal, how will they fuel the losses until they become profitable? This is perhaps the key reason why a company with US$1.1B in the bank is valued less than that amount.
Finally, news from Steakholder Foods, a company that is 3D printing meat. Evidently they received an official notice from NASDAQ that they face de-listing if they cannot maintain a stock price greater than US$1.00 per share. The company has 180 days to comply, so it should be interesting to see what unfolds.
A company set to appear was Essentium, who announced plans to use a SPAC-merger to launch on NASDAQ. However, that deal has been suspended so we’re wondering what the company’s next steps might be.
One company I’ve started to watch is ICON, the Texas-based construction 3D printer manufacturer. This privately-held company has been raising a significant amount of investment to the tune of almost half a billion dollars. At that level it is likely they will be discussing a transition to public markets at some point, which would certainly place them at or near the top of our leaderboard.
Another company that would seem logical to go public is VulcanForms, a manufacturing service using an advanced metal 3D printing process. They are currently privately valued at over US$1B, and going public could cause that to go even higher.
If you are aware of any other publicly-traded 3D print companies that should be on our leaderboard, please let us know!
Others In The Industry
While we’ve been following the public companies, don’t forget there are a number of private companies that don’t appear on any stock exchange. These privately-held companies likely have significant value, it’s just that we can’t know exactly what it is at any moment. The suspected bigger companies include EOS, Carbon and Formlabs.
Perhaps someday some of them will appear on our major players list.
Finally, there are a number of companies that are deeply engaged in the 3D print industry, but that activity is only a small slice of their operations. Thus it’s not fair to place them on the lists above because we don’t really know where their true 3D print activities lie.