Monday, 19 December 2016 23:46

Brean Capital Sees Bright Future for 3D Systems In Healthcare

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3D Systems Corp. (DDD), the additive manufacturing pioneer, believes the industry is on the verge of an inflection point in which it will generate volume and profits by “connecting prototyping to manufacturing.” Brean Capital’s Ananda Baruah, who has a hold rating on the tech company’s stock, highlights 3D Systems’ healthcare business as a market differentiator and driver of growth moving forward, reports Benziga.

Healthcare as a Successful Vertical

After a healthcare event hosted by the Rock Hill, S.C.-based company, the Brean analyst noted that 3D Systems’ healthcare business accounts for 27% of the firm’s overall sales, with an organic growth rate of 10% to 20% throughout 2015.Wrote Baruah in an analyst note: “We came away understanding 1) that the HC business itself could be in the process of growing into a legitimately material business on its own, and 2) more fully grasping DDD's strategy of leveraging the holistic platform capabilities of the HC vertical by applying it to the other target verticals of aerospace, automotive, and general industrial.”

Analyst: 3D 'Better Positioned Than Market Estimates'

After the 3D-printing industry boomed a few years back, 3D Systems and long-time rival Stratasys Ltd. (SSYS) experienced a significant slump and lack demand in the consumer segment. The current 3D-printing industry revival has been supercharged by the entrance of larger firms HP Inc. (HPQ) and General Electric Co. (GE) as the industry moves towards 3D printing for industrial manufacturing.

Baruah believes that 3D Systems is better positioned to gain amid this large-scale industry transition than the market estimates, as the firm works on developing “end-to-end solutions and ecosystems across verticals.” The analyst indicates that 3D Systems’ healthcare vertical is a prime example of how the firm can cultivate a vertical businesses and apply the platform to other key verticals moving forward, such as aerospace, automotive, defense and general industrial.

 

Author:  Shoshanna Delventhal

Source:  http://www.investopedia.com/news/brean-capital-sees-bright-future-3d-systems-healthcare

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