Proto Labs, Inc. (PRLB) and Materialize NV (MTLS) are two leading players in the 3D printing industry. PRLB operates as an e-commerce focused digital manufacturer of custom prototypes and on-demand production parts. The company offers injection molding, CNC machining, 3D printing and sheet metal fabrication products. On the other hand, MTLS, based in Belgium, provides additive manufacturing and medical software and 3D printing services on an international scale. Its solutions enable the healthcare, automotive, aerospace, art and design, and consumer goods industries to create 3D printing applications.
Rapid digitization and technological advancements have increased demand for 3D printing applications and devices in healthcare, automotive, aerospace, art and design, and consumer goods industries. consumption. Creating 3D digital models using computer aided design (CAD) or 3D scanners to conduct successful research and development activities also invites various business and government investments in this industry. The growing optimism of investors in this industry is evident in the Energy Select Sector SPDR ETFs (XLE) Gains of 9.9% since the beginning of the year. The 3D printing market is expected to grow at 29.5% CAGR and reach $ 63.46 billion by 2026. Thus, the PRLB and MTLS are expected to benefit.
While MTLS has lost 42.6% in the past six months, MTLS has jumped 1.7%. MTLS is clearly a winner with gains of 10.3% over PRLB’s negative returns in terms of performance over the past three months. But which of these titles is the best choice now? Let us know.
On October 20, 2021, PRLB signed an occupancy agreement to expand its additive manufacturing footprint in Raleigh, North Carolina. This expansion responds to the growing demand for PRLB’s 3D printing services from various applications using additive manufacturing for prototyping and production.
On December 7, 2021, MTLS licensed Siemens AG (SIEGY) Parasolid software for integration with industry leading MTLS software for data preparation and builds, Magics. This will allow MTLS to add native CAD workflows into Magics 26, providing an additional set of tools in addition to the mesh functionality. This powerful combination of reliable solutions will enable users to prepare for additive manufacturing processes, improve productivity, and provide optimal workflow in the 3D printing industry.
Recent financial results
PRLB’s total non-GAAP revenue for its fiscal third quarter ended September 30, 2021 increased 9% year-on-year to $ 116.19 million. The company’s gross profit was $ 55.32 million, representing a 1.3% year-over-year improvement. Its non-GAAP operating income was $ 12.74 million, which indicates an increase of 75.5% over the prior year period. PRLB’s non-GAAP net income was $ 9.71 million, down 45.9% from a year ago. Its non-GAAP EPS fell 47.8% year-over-year to $ 0.35. The company had $ 47.80 billion in cash and cash equivalents as of September 30, 2021.
For its fiscal third quarter, ended September 30, 2021, MTLS revenue increased 26.7% year-over-year to $ 60.44 million. The company’s gross profit was $ 35.98 million for the quarter, up 32.4% from the prior year period. Its operating profit was $ 5.25 million, indicating an increase of 2,132.8% over the previous year. MTLS net income was $ 10.02 for the quarter, compared to a net loss of $ 429,000 for the period last year. Its EPS stood at $ 0.17, down from a loss per share of $ 0.01 in the prior year period. The company had $ 194.95 million in cash and cash equivalents as of September 30, 2021.
Past and expected financial performance
PRLB’s EBIT and net income have declined at CAGRs of 30.2% and 24.3%, respectively, over the past three years. The tangible book value of the company has fallen to 0.2% CAGR over the past three years.
Analysts expect PRLB’s EPS to fall 40.7% year-on-year in the current year, but increase 17.1% next year. Its revenue is expected to grow 10.9% year-over-year in the current year and 8.1% next year. The company’s EPS is expected to grow 25% annually over the next five years.
In comparison, MTLS’s EBIT and net income have grown at CAGRs of 11% and 16%, respectively, over the past three years. The tangible book value of the company has increased by 24.6% CAGR over the past three years.
MTLS EPS is expected to grow 241.7% year-on-year in the current year and 17.6% next year. The company’s revenue is expected to grow 9.9% year-over-year in the current year and 11.9% next year. However, analysts expect the company’s EPS to increase at a rate of 63.1% per year over the next five years.
In terms of EV / futures sales, MTLS is currently trading at 5.73x, 100.4% higher than PRLB’s 2.86x. In terms of booking price over the past 12 months, the 1.77x from PRLB compares to 5.44x from MTLS.
PRLB’s last 12 months turnover is almost 2.1 times that of MTLS. OXY is also more profitable, with a rate of 56.9% Gross margin against 46.8% for PRLB.
In addition, PRLB’s leveraged free cash flow of 8.6% compares favorably with PRLB’s 4.7%.
While MTLS has an overall rating of B which translates to Buying into our property POWR odds system, PRLB has an overall rating of C, equivalent to Neutral. POWR scores are calculated by considering 118 distinct factors, each weighted to an optimal degree.
MTLS has a B rating for growth, in line with its impressive growth over the past year. MTLS EBIT has increased 13,998.5% over the past year. However, the D rating for PRLB’s growth is in line with its negative EBIT growth over the past year.
MTLS has an A rating for sentiment, in line with bullish analysts’ estimates. MTLS EPS is expected to increase 500% year-on-year to $ 0.04 in the current year. PRLB’s D rating for Sentiment is in line with its gloomy earnings growth outlook. Analysts expect PRLB’s EPS to decline 46% year-on-year in the current year to $ 0.27.
Of the seven actions of Technology – 3D printing Industry, MTLS is ranked # 1, while PRLB is ranked # 3.
Beyond what we have stated above, our POWR rating system also rated MTLS and PRLB for value, momentum, stability and quality. Get all MTLS assessments here. As well, Click here to see additional POWR dimensions for PRLB.
The start of adoption of 3D printing and related technologies in various industries is raising investor optimism and attracting business investment in this industry. MTLS and PRLB should benefit from these tailwinds. However, better analyst sentiment and higher profit margins make MTLS a better buy here.
Our research shows that the odds of success increase when betting on stocks with an overall buy or strong buy POWR rating. Click here to access the best rated stocks in the Technology – 3D Printing sector.
PRLB shares were left unchanged on Monday after trading hours. Year-to-date, the PRLB has fallen -65.77%, compared to a 29.35% increase in the benchmark S&P 500 over the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a particular interest in researching market inefficiencies. She is passionate about educating investors so that they can be successful on the stock market. Following…