Proto Labs HQ
Proto Labs has not put 3D printing investment in its plans for growth.
Major industry player Proto Labs (NYSE: PRLB) has stated that it does not intend to invest in 3D printing technology.
According to a report by Reuters, the medical and aerospace rapid prototyping firm is planning to make its first acquisition in its 14 years, but this deal does not concern additive manufacturing.
This may come as something of a shock to investors, as 3D printing is steadily gaining popularity and while some commentators claim the developments can dramatically change the way the manufacturing industry operates, chief executive Bradley Cleveland stated it is slow and unsuitable for commercial applications.
Shares of Proto Labs closed lower on the New York Stock Exchange by 0.7 per cent at the end of trading on Friday (March 22nd) at $46.81 per unit, but since it went public in February 2012, shares in the company have rallied by more than 90 per cent.
An association with 3D printing giants such as 3D Systems (NASDAQ: DDD) and Stratasys (NASDAQ: SSYS) has boosted Proto Labs' shares, Reuters argues, putting the company in the jetstream of the current favourite tech sector on Wall Street.
This hype was further boosted by Barack Obama's State of the Union address earlier in the year, in which he heralded 3D printing as a ground-breaking technology with the power to "revolutionise the way we make almost everything".
Nevertheless, Mr Cleveland drew a distinction between 3D printing and the prototypes that his company makes for customers such as Xerox and Danaher.
Proto Labs' way of working is in essence the opposite of additive manufacturing in that it chips away at large blocks of material to sculpt the desired shape, as opposed to making objects layer by layer.
As such, Mr Cleveland noted that 3D printing is unsuitable for commercial needs.
"It is dramatically slower, and the choices of material you have are very few in number. They are not approved for any kind of production, the vast majority of them at least," he remarked.
Some analysts have stated that the increasing popularity of the 3D printing sector and the rising availability of affordable 3D printers could damage small-volume manufacturers such as Proto Labs, which specialise in producing prototypes.
Proto Labs - which is headquartered in Maple Plain, Minnesota - produces prototypes out of metal and plastic using software that automates tasks such as analysing designs and simulating the manufacturing process, achieving expedient turnarounds.
Mr Cleveland - who co-founded laser 3D printing company AeroMet before joining Proto Labs in 2001 - stated he believes the company will be "significantly larger" within a couple of years
He declined to comment on how much the company would be willing to pay for an acquisition or which assets it had in the crosshairs.
"We plan to maintain at least 25 percent top-line growth," he said.
Originally founded as Protomold Company, Proto Labs' annual revenue has increased by nearly threefold since 2008, while its market value stands at $1.5 billion.
Thomson Reuters data puts its revenue growth estimate at an average of 23.6 per cent over the coming two years.