Josh Grasmick

3D printing continues to be one of the most attractive industries for individual investors right now. And with the European debt crisis and slowing growth in China, we may – if given the room – be able to innovate our way to an American Renaissance.

Since the technology is still in its infancy, it’s not too late to grab a slice of the pie.

Today, we’re going to cover one company that’s found an interesting niche in this market.

Opposite of 3D Systems, the current leader in the consumer market, on the publicly traded 3-D printing spectrum is ExOne (NASDAQ: XONE), the relatively new kid on the block.

Since becoming a public company on Feb. 8, ExOne has been the preferred stock out of the 3-D printing “pure plays”, doubling since its IPO.

The company is currently operating in Asia, Europe and North and South America.

ExOne operates almost entirely in the industrial, large-scale market, catering to large manufacturers in industries like automotive production. Notable products include the S-Max, S-Print, and M-Print.

M-Lab, however, serves another interesting market segment for ExOne: the researchers and educational customers space. As one of the smallest printers available by ExOne, M-Lab is particularly designed to be used in labs.

While other pure plays like 3D Systems or Stratasys sell printers in volume, ExOne sells a small number of large-scale printers. These printers sell for a hefty cost, measured in the millions. In 2012, for example, they sold only 13 machines, but generated roughly $16 million in revenue.

While customers have to pay a pretty penny for ExOne’s 3-D printers, and sales are expected to increase for 2013, that’s not where the company expects to garner their main source of revenue.

Its main source, it turns out, derives from strategically located public service centers (PSCs) in industrial, high-manufacturing areas. With only five stationed PSCs, the arrangement accounted for 45% of ExOne’s 2012 sales. The company plans to expand to 15 PSCs by the year 2015, which will help ExOne attain a goal of $100 million in revenue, and gross margins exceeding 50%, set by CEO Kent Rockwell.

Although ExOne has yet to post positive earnings, it looks to be on the path to profits. If other public 3-D printing manufacturers serve as a guide, it may improve its bottom line substantially in this rapidly growing market.

So what’s my take on it?

Although 200% year-over-year revenue growth makes it a tempting prospect, the company is starting from a very small base. The company reported only $33.9 million in revenue over the past 12 months and currently trades at 20.5 times sales. It could, however, catch up to its lofty valuation if it does what it’s competition is doing: acquire prospects like there’s no tomorrow.

Here’s one speculation I’d like to share. There’s a gold rush on to stake a claim in the rapidly expanding 3-D printing market. 3-D printing behemoths such as 3D Systems and Stratasys have been on an acquisition binge. Stratasys, for example, recently acquired consumer 3-D printing specialist MakerBot. ExOne is on track to grow revenues from companies seeking to take advantage of its metal printing technology. It’s possible that ExOne, with a market cap of under $1 billion, could become an acquisition target.

It will be interesting to see how ExOne fares as it penetrates the high end of the market, making it a good for any watch list.

Regards,

Josh Grasmick
for, Tomorrow in Review

You May Also Like:


The Anti-Buffett Investment Strategy

Kris Sayce

The old adage "invest in businesses you understand" may be a good strategy if you're Warren Buffett. But for the rest of the world, this advice effectively closes off an entire section of the market. One that that could be exploited for huge gains, and is turning heads right now thanks to a little technology called 3D printing. Kris Sayce explains...

Josh Grasmick

Josh Grasmick is managing editor of Tomorrow in Review and associate editor of Technology Profits Confidential and Breakthrough Technology Alert. After graduating from Washington College with a degree in English, the self-described autodidact was interviewed by Time magazine for his novel entrepreneurship and worldwide eco-adventures. His experience with those in the fields of science, medicine and technology puts readers ahead of the curve and on top of the market.

Recent Articles

Laissez Faire
One Great Tip for Investing in 3-D Imaging Technology

Chris Campbell

By now you're likely familiar with 3-D printing. It's one of the most important tech developments of the last decade, and it's just getting started. But as Chris Campbell explains, there's another form of 3-D technology that could soon overshadow it. Read on...


A Unique Way to Play the Health Craze

Greg Guenthner

With the rise of the organic food market, people are becoming more and more health conscious, and thus, more aware of what goes into cultivating their food. But there's one aspect of this market that's long overdue for a massive overhaul, and that could present a very lucrative investment opportunity. Greg Guenthner explains...


How to Invest in a Strong Dollar World

Chris Mayer

Our friend Jim Rickards and founder Addison Wiggin believe the dollar will soon meet its demise. Chris Mayer, on the other hand, thinks the dollar will only get stronger this year and next. We'll let you decide for yourself. In this featured essay Chris lays out his train of thought and a guide for investing in a strong dollar world. Read on...


“How to Get Rich” is Not How You’d Expect

Chris Mayer

The first thing you might notice about the life of Felix Dennis is that he devoured crack cocaine during massive orgies with hookers at his mansion. Yet despite his penchant for sex and blow, he admitted, "making money is the one addiction I cannot shake." And thankfully, he wrote a book about it. Chris Mayer explains...


Maestro
Will The Swiss Vote to Get Their Gold Back?

Ron Paul

The Swiss gold referendum in November is far more important that many people realize. The outcome could quell or confirm doubts about the amount of physical gold available at the New York Fed. And that could send the price of gold higher by multiples. Dr. Ron Paul brings you up to speed on what's happening in Switzerland...


Bitcoin: Buy Now or Forever Hold Your Peace

Chris Campbell

Bitcoin has been pretty quiet lately. But that doesn’t mean big things aren’t taking place behind-the-scenes for the digital currency. In today’s Laissez Faire Today, Chris Campbell pulls back the curtain and shows you how bitcoin is quietly slipping into the mainstream. He also shows you why now could be the time to buy now, or forever hold your peace. Read on…