Expert Opinion: 3-D Printing Material Prices Won't Collapse Anytime Soon

Industry watchdog Wohlers Associates recently issued a note saying that it believes that increased competition and the expiration of patents will eventually cause 3-D printing material prices to fall. This scenario would put 3-D printing giants Stratasys (NASDAQ: SSYS  ) and 3D Systems (NYSE: DDD  )  at risk, because selling consumable materials at lush profit margins is key to their businesses. For investors in these companies, declining material prices would certainly put profitability in jeopardy and pose a threat to the long-term investment thesis.

However, 3-D printing expert Rich Stump of FATHOM, a highly experienced Stratasys reseller and 3-D printing service center, believes that while Wohlers Associates' theory may be true in the lower-end, much smaller consumer segment, the higher-end professional market is likely to experience the opposite effect. Stratasys and 3D Systems are constantly developing new materials with advanced properties and will likely keep prices high for the foreseeable future, Stump argues. And unless professional customers want to void their warranties, they're going to use consumable materials sold from the 3-D printing manufacturer -- at a price that the manufacturer sets.

Of course, if 3-D printing material prices rise in the future, as Stump believes is likely, the prospects for profitability for Stratasys and 3D Systems could be greatly improved. In the following video, 3-D printing analyst Steve Heller sits down with Rich Stump to get an insider perspective on material prices.

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  • Report this Comment On April 10, 2014, at 12:58 AM, FrogmanST4 wrote:

    I own DDD at $65.25 and needless to say its in the red. I am debating on buying more shares to lower my cost basis but am concerned that some of the naysayers predictions are coming true. Enter in HP and that really makes me concerned. Any advice from anyone else in this stock would be foolishly appreciated.

  • Report this Comment On April 10, 2014, at 12:34 PM, rintintinny wrote:

    Here's some good old fashioned analysis for you on this stock. I bought in at a higher price than you did. The trend on this stock is down and down some more. I closed my position at a 25% loss and will re-enter if momentum swings with some good reasoning behind it. More money to be made in the short term elsewhere. Good luck.

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