3d systems: 3-d printing and graphene, the next big thing?
Graphene may be the key 3- In our article of February 27, we said that although 3- D. printing is still in its infancy and a new technology has caused a stir: 4-D printing. Actually, 4- D. printing is 3- D. printing: no static electricity is built 3- Item D, the technology allows dynamic materials Assembled into different shapes after printing, or evolved in response to the environment over time. In all, 4- D. printing is a combination of smart materials that change shape in response to external stimuli ( Water, air, heat or light), with high- 3D printer resolution No commercial use is expected until three to five years, but the technology may change the current 3- D. printing landscape. It is worth noting that the material will be in 4- We believe that this will greatly change the value chain of the printing industry. So a few days ago, when Stratasys (NASDAQ:SSYS) Announced cooperation with private companies in graphene technology, \"development of graphene- Enhanced 3D printing material \". The deal echoes an agreement signed a few months ago by graphite exploration firm Lomiko (OTCQX:LMRMF) Graphene lab will launch the \"graphene 3D lab\" for the development of graphenebased 3- D. printing materials. Even if graphene does not change its shape under external stimulation, it is clearly the material of the future. As we explained in our last post ( \"Opportunities for Nokia and graphene \") Graphene, a single layer of graphite carbon atoms, is the thinnest and hardest material ever. It is also more conductive than copper and flexible like rubber. All of these qualities provide a huge commitment to a wide range of applications from IT and consumer electronics to energy, aerospace, and medicine. . . and to 3-D printing! Although plastic and metal are currently the most used materials in 3- Graphene may become a key material in the next few years, because it combines the properties of plastic and metal: it is very strong, but flexible and lightweight. Are printer manufacturers under potential profit pressure? Graphene and the above intelligent materials may be expanded by 3- D printer, confirm 3- In the long run, the chance of printing the front line is huge. But again, we question the impact on the profits of printer manufacturers. As early as February, we said that due to its rising importance, the value chain in the material industry may climb over the years, and material suppliers may demand a higher share of profits on consumables ( Prices have risen significantly) If more complex materials are needed. The fact that Stratasys needs to work with graphene technology to develop complex materials confirms our view. This indicates that Stratasys is committing operating expenses and/or capital expenditures to the project and that it cannot simply purchase raw materials from suppliers or go alone. Since the future of printer manufacturers depends mainly on the growth and profitability of consumables in the revenue portfolio, these transactions may put some pressure on printer manufacturers to profitability of consumables. too-distant future. Please note that the profit margin of consumables is already very high (74. 3D system 7% for the first quarter) Obviously more unfavorable than upward. All in all, this has strengthened our long-standing consensus. The term profit margin of the 3D system is too high (NYSE:DDD)and peers. We reiterate our commitment to 3- 3D printing industry, especially our sales suggestions on 3D Systems. Stocks are currently at 67x-44x 2014- 2015 EPS, in our view, this is unreasonable according to the profitability of the company (+20%- 30% a year, the bestcase scenario). For those willing to invest 3- D. the printing industry is an interesting and lower one in these uncertain times There are still risk strategies for long-term strategies and short-term 3D Systems. At 45x-30x 2014- With a 2015 earnings per share, stratasy\'s valuation seems to be much more decent. The important thing is that the company is highly innovative ( Stratasys will most likely be considered 4-D printing) And will become the dominant force in consumer business ( Check the recent transaction of Home Depot) This will push 3- Printing industry in the next few years. Disclosure: The author does not hold any positions in any of the stocks mentioned, and does not have a plan to start any positions within the next 72 hours. The author wrote this article himself and expressed his views. The author was not compensated ( In addition to Seeking Alpha). The author has no business relationship with any company mentioned in this article. Editor\'s note: This article covers one or more microcap stocks. Please note the risks associated with these stocks.