Tag: Inc. (DM)

Could 3D Printing Transform Manufacturing? Why Desktop Metal Is a High-Tech Play to Watch

Posted on by The INO.com Team

Additive manufacturing, commonly referred to as 3D printing, has emerged as a transformative force in global manufacturing. Unlike traditional subtractive methods that cut away material to create parts, 3D printing builds products layer by layer, offering unparalleled design flexibility. This shift empowers industries to innovate without the constraints of conventional production techniques.

Beyond efficiency and customization, additive manufacturing promotes sustainability. By using only the necessary amount of material for production, it significantly reduces waste, an essential factor for industries striving to meet environmental goals. Additionally, localized manufacturing reduces the need for extensive logistics chains, further cutting carbon emissions.

Industries from aerospace to consumer electronics are leveraging these benefits. For instance, aerospace manufacturers are using 3D printing to produce lightweight components that enhance fuel efficiency, while the medical field is adopting it to create patient-specific implants and prosthetics. This wide applicability, coupled with rapid technological advances, is propelling market growth, with the total addressable market projected to exceed $100 billion by 2030.

Desktop Metal’s Unique Approach to Additive Manufacturing

At the forefront of this revolution is Desktop Metal, Inc. (DM), a company recognized for its innovations in 3D metal printing. Founded in 2015, the Massachusetts-based firm has consistently pushed boundaries, especially in developing technologies suitable for high-volume production.

Desktop Metal’s binder jetting technology exemplifies this innovation, enabling rapid production of intricate, high-strength metal parts. Unlike traditional methods that often require post-processing, binder jetting minimizes additional steps, making the process more efficient and cost-effective. The Production System P-50, one of the company’s flagship offerings, is designed specifically for scaling up production without compromising on quality.

Moreover, Desktop Metal's strategic acquisitions, such as the purchase of EnvisionTEC, have expanded its capabilities into areas like polymer-based 3D printing. This diversification allows the company to cater to a broader range of industries, from healthcare to consumer goods. Its recent focus on digital dentistry reflects a keen understanding of emerging markets, with tailored solutions that streamline dental manufacturing processes.

Market Expansion and Strategic Moves

In addition to its technological strengths, Desktop Metal has made calculated moves to expand its market presence. Partnerships with industry leaders have facilitated entry into high-growth sectors, such as healthcare and automotive. For instance, its collaboration with dental labs capitalizes on the growing demand for digital solutions in medical manufacturing.

The company has also extended its footprint globally, with investments in regional production hubs to better serve international clients. These efforts align with the broader trend of decentralizing manufacturing, enabling faster delivery times and reducing logistical complexities.

While Desktop Metal’s journey hasn’t been without challenges, including fluctuating revenues and macroeconomic pressures, its resilience is noteworthy. The company’s ability to adapt—whether by diversifying its product lines or optimizing its supply chain—underscores its commitment to long-term growth.

One particularly intriguing development is the proposed merger with Nano Dimension Ltd. (NNDM), a strategic move that could create synergies in additive manufacturing technology and expand Desktop Metal’s market access. Such initiatives highlight the company’s proactive approach to navigating a competitive and rapidly evolving industry.

Financial Snapshot and Investment Implications

Desktop Metal’s financial health reveals both opportunities and risks. In the first nine months of 2024, the company reported $115.9 million in total revenue, a decline from $137.4 million during the same period in 2023. While this dip reflects short-term hurdles, management remains optimistic about achieving profitability through cost-cutting measures and scaling production.

The company’s balance sheet is a mixed bag. With $30.6 million in cash and cash equivalents as of September 2024, it has the liquidity to sustain operations in the near term. However, the accumulated deficit of $1.8 billion signals a history of operational struggles. Investors must weigh these financial metrics against Desktop Metal’s potential to capture a significant market share in the burgeoning 3D printing industry.

Desktop Metal also faces market volatility. Its stock has been impacted by broader economic conditions, including rising interest rates and investor hesitancy toward speculative tech stocks. Despite this, the company’s focus on high-growth markets and its leadership in metal 3D printing technology present compelling reasons for optimism.

Desktop Metal is a classic high-risk, high-reward opportunity for investors. The stock’s potential upside is tied to its ability to scale operations, maintain innovation leadership, and capitalize on growing demand for additive manufacturing. Those with a higher risk tolerance and an interest in transformative technologies may find it a worthwhile addition to their portfolios.

 

3-D Printed Homes Could Be the Newest Craze – 3 Stocks Set to Benefit

Posted on by The INO.com Team

The current macroeconomic environment has been less than kind to the housing sector. Demand was already reeling from decades-high inflation, and efforts to contain it have only ended up compounding the misery. In little over a year, the Federal Reserve approved its tenth interest-rate hike to take the Fed funds rate to a target range of 5%-5.25%.

With increasing borrowing costs, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) inched up to 6.91% by the end of May. With consumer debt surpassing $17 trillion during the first quarter of the year to hit a fresh all-time high, mortgage demand dropped to its lowest levels in three months and was accompanied by a decline in existing home sales.

Hence, it is unsurprising that between June 2022 and the end of the previous year, U.S. homeowners have lost $2.3 trillion since June, according to a new report from the real-estate brokerage Redfin.

With non-farm payrolls and private payrolls surpassing expectations to increase by 339,000 and 278,000, respectively, in May to signal persistent tightness in the labor market in a resilient economy, there are doubts about whether the Fed and major central banks around the world would be willing to pause or pivot their monetary stance.

While mortgage rates are expected to keep rising and weighing on the demand for available homes, there are between 1.5 million and 6 million fewer homes in the U.S. than there are households ready to occupy them, which is contributing to housing inflation and rent hikes. With the number of housing units per 1000 people declining over the past decade, the country is undeniably in the middle of surging homelessness.

As a result, the imperative to construct homes cheaper and faster despite labor shortages in construction jobs has been driving the fledgling but exponentially growing practice of 3-D printing them.

The technology, which dates back to the 1980s, uses computer-generated designs to create objects with a nozzle at the end of a robotic arm to extrude layer-upon layer of concrete or other materials like a soft-serve ice cream machine. In the case of 3-D printed homes, the pipe is attached to scaffolding and programmed to move in a specified shape.

3D printing uses recycled materials and uses only as much as is needed without trimming or subtracting excess materials. As a result, this additive manufacturing technique is more eco-friendly and cuts waste by 60%, thereby contributing to a circular economy without sending unused wood, concrete, or glass for window panes to landfills.

3-D printing promises to be an effective workaround to the ongoing labor shortage in the construction industry. While the machine is printing, it requires little supervision or staff on the site, which replaces on-site carpenters wielding hammers and nail guns, prevents injuries, and saves costs on workers’ compensation.

A 2018 study in the academic research publication IOP Science: Materials Science and Engineering, based in the U.K., argues that 3D printing can cut costs by at least 35%.

3-D printed homes are also suitable for effective protection against natural disasters, such as hurricanes, floods, and wildfires. In September 2022, the New York Times reported that a series of 3D-printed homes in Nacajuca, Mexico, have tolerated extreme conditions, including a 7.4-magnitude earthquake.
As a result, proponents see promise in 3D-printed homes providing homeless housing, accessory dwelling units, and rapid reconstruction in disaster zones, such as Ukraine.

Moreover, with the capability of producing complex shapes that can’t be otherwise produced during conventional construction, improvement in aesthetics and mass-customization make 3-D printed homes an architect’s delight. Although printing out a multi-story house is slightly more complicated, there are successful examples, including a 3D-printed apartment building in Germany.

Although the jury is still out on which system is comparatively superior, homebuilders use both on-site (which extrude recycled construction materials to build corduroy-patterned concrete walls right at the building site) and factory-based 3D printers to manufacture homes.

While builders in the United States have been experimenting with 3D printing for several years, a 100-house community in Georgetown, Texas, might someday be looked back on as the place which changed mass housing forever.

Lennar Corporation (LEN), the nation’s second-biggest homebuilder and construction technologies firm ICON, announced in November 2022 that they have begun construction on the 100-home Wolf Ranch development in Georgetown, Texas, with sales scheduled to begin on June 10.
According to the homebuilder's website, starting prices for three- and four-bedroom homes range from $476,000 to $566,000. Homes will range from 1,600 to 2,000 square feet.
According to ICON's CEO Jason Ballard, 3-D printed homes, whose construction costs are expected to keep declining with increasing scale, have “better design, higher strength, higher energy performance and comfort, and increased resiliency.”

If Chris Murphy, chief strategy officer for Oakland-based Mighty Buildings, is to be believed, “There is no way in 10 years we’ll be able to be building like we are today. Even if we didn’t have a massive shortage on the supply side, which we do, we don’t have the labor to continue building as we would want to today, and we have an environmental crisis.”

Given the potential of this technology, the increasing interest is evident from the fact the construction with 3D printers was one of several housing innovations on display during the Pacific Coast Builders Conference held last month in Anaheim.

Given the high growth rate and low penetration, the technology has a long runway ahead as it seeks to transform housing across the world and even beyond it, one layer at a time. Below are a few other stocks that could provide exposure to investors keen to make a long-term bet on this technology.

Stratasys, Ltd. (SSYS)

SSYS offers connected, polymer-based 3D printing systems, related services, consumables, and additive manufacturing (AM) solutions, mainly in Israel, the United States, Germany, Hong Kong, and Japan. The company’s offerings include 3D printers, materials, software, expert services, and on-demand parts production.

Amid unsolicited interests and advances from Nano Dimension Ltd. and 3D Systems Corporation (DDD), on May 25, SSYS announced its entry into a definitive agreement with Desktop Metal, Inc. (DM) whereby the companies will combine in an all-stock transaction valued at approximately $1.8 billion.
By combining the polymer strengths of SSYS with the complementary industrial mass production leadership of DM, the combined entity post-merger is expected to generate $1.1 billion in 2025 revenue, with significant upside potential in a total addressable market of more than $100 billion by 2032.

Proto Labs, Inc. (PRLB)

PRLB digitally manufactures custom prototypes and on-demand production parts, primarily from commercial-grade plastic, metal, and liquid silicone rubber. With a digital model that supports the transition from prototyping to production, the company can support developers and engineers effectively.

Materialise NV (MTLS)

Headquartered in Belgium, MTLS provides software and three-dimensional (3D) printing services. Through quality, reliability, and repeatability, which form the backbone of the 3D printing industry, the company serves and transforms businesses worldwide, including Colombia, Brazil, Australia, Malaysia, China, Japan, Austria, Poland, Germany, and France.