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 years 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 years revenue.
We ask whether 3D printing, long touted as the
next big thing, can satiate some of the growth
appetite so desperately needed in todays 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
years 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 8
th
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