HP’s entry a concern for 3D printing peers
Hewlett-Packard products, strategies focused on key growth areas (Part 8 of 10)
3D industry players experienced huge increase in their share prices in 2013
Shares of leading players 3D Systems Corporation (DDD), Stratasys, Ltd. (SSYS), ExOne, and voxeljet in the 3D printing space experienced a huge increase in the last year. In fact, with the exception of ExOne, all other companies’ saw shares increase by more than 30%. 3D Systems experienced a ~95% increase between September 2013 and January 2014. In 2Q14, 3D Systems and Stratasys reported 25% and 67% year-over-year revenue growth, respectively.
If Hewlett-Packard Company (HPQ) performs well, it will benefit the PowerShares QQQ Trust, Series 1 ETF (QQQ) and the Sector SPDR Trust SBI Interest (XLK) that have significant exposure to the company.
HP announcement leads to huge volatility for industry players
Despite the gains, all the above-mentioned stocks suffered major declines in 2014 too. As of November 2014, 3D Systems and Stratasys stocks were respectively down 58% and 8% year-to-date. The primary reason for this decline is thought to be HP’s announcement that it will target the 3D printing industry for its future growth.
According to 3D Systems CEO Avi Reichental, HP’s entry into the 3D printing industry is expected to pose significant challenges to existing players in the industry. Wohlers Associates analyst Terry Wohlers expressed optimism about HP’s Multi Fusion Jet technology. He believes that HP’s technology has the potential to throw many other firms “out of business.”
HP’s lower costs and faster throughput is expected to make the 3D printing industry more competitive. As the above chart shows, Stratasys and 3D Systems have increased their R&D (research and development) efforts to stay competitive. And, along with HP, multinational Autodesk, Inc. is also planning to enter the market.
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