Market Roundup: Materialise IPO rumour mill heats up

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Materialise

Rumours that Materialise, the first rapid prototyping service bureau to be founded in the European region of low countries Benelux (Belgium, the Netherlands and Luxembourg), will float on the stock market are heating up.

Talk of a Materialise Initial Public Offering (IPO) surfaced in the latter part of 2013, the year in which ExOne (NASDAQ:XONE) and Voxeljet (NYSE:VJET) both announced their IPOs, following in the footsteps of 3D printing industry giants Stratasys (NASDAQ:SSYS) and 3D Systems (NYSE:DDD).

3D printing industry commentator and Inside 3D Printing conference co-organiser Tyler Benster put fuel on the fire at the turn of the New Year when he was quoted by Forbes as saying: "The wild success of the ExOne and Voxeljet IPOs in 2013 will pave the path for more IPOs in 2014," a prediction that hints at more than one IPO from major names in the 3D printing arena - of which Materialise seems a likely candidate.

Nevertheless, January has not been kind to the modest but growing clutch of 3D printing stocks, which may have dampened speculation that Materialise is about to appear on an index. Nevertheless, the notion has gripped the tech investment set and it seems likely the matter will continue to intrigue until word from Materialise confirms or denies the gossip.

Here's my summary of how the major 3D printing industry stocks have fared in the first couple of weeks of the year - and how they are looking ahead of their full-year results.

3D Systems

3D Systems' rise and rise over the final quarter of 2014 was a gift to investors, but what goes up must come down and after a spike in the New Year the industry juggernaut's shares lost their buoyancy.

This is in spite of a slew of announcements made at International CES 2014, including the launch of the ceramic 3D printer the CeraJet, the ChefJet confectionary 3D printer, 3DMe Photobooths and the appointment of pop star Will.I.Am as Chief Creative Officer.

Moreover, 3D Systems has already made significant business partnership announcements in 2014, revealing it is acquiring special effects company Gentle Giant Studios at the very beginning of January and it has struck a deal with chocolate giant Hershey to develop chocolate 3D printing technology.

At the end of October 2013, when the company announced its results for the third quarter of the year, 3D Systems' guidance for the full 2013 year was updated to be in the range of $500 million to $520 million, reducing its non-GAAP earnings per share guidance to be between $0.93 to $1.03.

CEO Avi Reichental was characteristically positive in his forecast: "We fully expect that the higher investments we are making currently will favourably influence our results in the coming periods."

3D Systems' stocks are still double what they were a year ago, but the peak at New Year followed by the current pronounced tumble has dented investor confidence.

When the markets closed on Friday (January 24th), 3D Systems' share price was down by 6.37 per cent - or 5.43 points - to $79.87 per unit.

Stratasys

When the NASDAQ wakens today (January 27th) it will be to Stratasys' news that it has launched the world's first colour multi-material 3D printer, the new Objet500 Connex3.

After a comparatively silent CES - where MakerBot arguably made enough noise for both companies with the launch of the new Z18 3D printer, the latest incarnation of the Replicator and the Replicator Mini at the Las Vegas event - Stratasys waited for the dust to settle before announcing its optimised pre-settings for the Objet30 OrthoDesk and Objet Eden 3D Printers have been added to the newest 3Shape Implant Studio dental software.

Much like 3D Systems, Stratasys peaked after a long 12 months of gradual, stop-start appreciation on the NASDAQ index. But unlike 3D System's marked slide in January, Stratasys looks like it could climb out of its most recent trough, continuing its snakes and ladders growth pattern into 2014.

At the beginning of November 2013 when Stratasys announced its Q3 results, the company quoted a revenue guidance of $470 million to $490 million for the 2013 fiscal year, with Non-GAAP earnings of $1.75 to $1.95 per diluted share. Looking ahead to 2014, earlier this month Stratasys said it expects Non-GAAP operating margins this year to "remain relatively consistent with levels recognised in 2013".

CEO of Stratasys David Reis said: "We enter the new year with positive momentum and an expectation of continued strong growth for our industry-leading products and services. Revenue synergies continue to develop from the merger between Stratasys and Objet, which is reflected in our outlook for organic sales growth of at least 25 per cent. In addition, the performance of MakerBot, which we acquired in August of 2013, is exceeding our expectations and is on track to be accretive by the end of the year. We expect 2014 will be another exciting year for Stratasys and our shareholders."

At close of play on the NASDAQ before the weekend, Stratasys was down by 3.7 per cent to $121.41 per share, which (like 3D Systems) is around $40 better off than in January 2013.

ExOne

ExOne is fast homing in on its one-year anniversary, after its IPO in February 2013. ExOne has not had the easiest first year on the stock market, but then newcomers always suffer throughout the initial period of adjustment (IPoA? To coin a phrase?).

As such, ExOne investors took a knock last week when the company unfortunately marked the New Year with a significant stocks slip following the announcement it is revising its full-year guidance for 2013.

The global provider of metal additive manufacturing technologies and products adjusted its revenue for 2013 down from approximately $48 million to between $40 million and $42 million. This revision is down to incomplete machine sales, with these deals due to be pushed back into the first half of 2014. The sales that have not yet reached completion are for customers in France, Mexico, India and Russia. Given the average price point of an S-Max is $800,000, ExOne's full-year results are dependant on every sale. In this instance, one S-Print and four S-Max system sales are yet to be completed.

Chairman and CEO Kent Rockewell was positive but realistic about the news, saying earlier this year: "While naturally we are disappointed with this shift in timing for these machines, we remain enthusiastic with the growing interest in the ExOne binder jetting technology from our global customers for all industrial material applications. We believe that these machine sale delays are only due to timing and no other factor. We also expect to quadruple production and triple sales of the M-Flex in 2014."

Despite having a tricky first year on the NASDAQ, ExOne still closed the year higher than it opened - something every investor wants to see - the but post-New Year slump has been steep at nearly -$15.

At close of play on Friday, ExOne was 7.3 per cent down to $50.59 per unit.

Voxeljet

Voxeljet has barely had a full quarter on the stock market and so the company's share price will be subject to the IPoA. Nevertheless, the company made sure to close 2013 with a bang, asserting itself amongst the likes of 3D Systems, Stratasys and ExOne with a major product announcement at Euromold, one of the biggest events on the industrial additive manufacturing calendar.

The German company announced the launch of the VX2000 industrial 3D printer at the Frankfurt-hosted trade show, a machine with a two cubic metre build space designed for automotive and aerospace applications.

Back in October, Voxeljet announced its IPO of 6,500,000 American Depositary Shares at a public offering price of $13.00 per ADS. Of the 6,500,000 ADS sold in the public offering, 5,600,000 were sold by the company and 900,000 were sold by its shareholders. The net proceeds of the IPO to the company are estimated to be around $64.5 million after deducting underwriting discounts and commissions, and estimated offering expenses.

The company touched base with investors in November, revealing third quarter revenues were up by 77 per cent year-on-year to kEUR 3,571 driven by an increase in 3D printer sales. Furthermore, revenues for the nine months to the end of September rose by 20.6 per cent, or kEUR 1,364. Looking ahead, the company anticipates revenues of more than €11 million ($15 million) for the full 2013 year

At market close on Friday, Voxeljet proved not to be immune from the current bearish feeling on the 3D printing stock front, suffering a fall of 7.5 per cent to $36.15 per unit.