Investing in Materialise (NASDAQ:MTLS)

Materialise (NYSE: MTLS) is one of the largest and most well-established companies in the 3D printing sector. Founded in 1990, the company has pioneered a number of different technologies and methods over the years that have become industry standards. As 3D printing has become more and more sophisticated, industries from aerospace to architecture are gradually becoming more and more reliant on companies like Materialise to produce low cost, high-quality products. Materialise is well-positioned to capitalize on the continuing 3D printing revolution that is being seen across different sectors of the economy today.

What is Materialise (MTLS)?

3D Printing, also known as additive manufacturing, is the process of inputting computer-generated designs into software, which in turn guides a machine to add layer upon layer of material to create three-dimensional objects. The benefits of 3D printing over traditional manufacturing include increased ability to customize products, more design freedom, faster production timelines, and fewer supply chain issues due to the digitalization of all aspects of the process. The current global manufacturing industry is worth an estimated $12.8 trillion dollars. Of that, 3D printing has only been able to capture less than 0.1% of the market share.

Headquartered in Belgium with branches around the world, Materialise owns and operates 175 3D printers in 18 different countries. Their 1,900 employees ensure that the company is able to provide customized solutions to meet a variety of customer needs. Materialise provides solutions to clients through three distinct business streams. Their first stream is software, which provides companies with the necessary technology to create 3D printed products in-house on their own 3D printers. This software allows clients to manage and control the printing process to ensure that the highest quality standards are met throughout the entire process, from design all the way to printing. By being compatible with most 3D printers,  Materialise’s software has created an ecosystem that is user friendly and is able to maximize efficiencies. Original Equipment Manufacturers (OEMs) of 3D printers such as HP, Nikon, and Essentium have all worked with Materalise to ensure that the software runs smoothly on their machines.

The second stream is medical, which allows clients in the medical field to provide treatments tailored to each unique patient through custom printed and designed visualization tools, implants, or even surgical tools. The largest customer base for this stream include hospitals, research institutes, and medical device manufacturers. Examples of this work include a partnership with Henry Ford Health Systems to 3D print 1,000 hearts. Using Materialise software, doctors were able to develop a three-dimensional model of organs in order to plan out a detailed strategy prior to medical procedures that traditional scans can not provide. This is advantageous as it allows for a more in-depth understanding of patient-specific circumstances and as a result, lower the necessity of invasive surgical procedures.

The final stream is manufacturing, which allows clients to work with Materialise to develop designs and use Materialise’s facilities to create products. With one of the largest 3D printing factories in the world, clients have access to 20 different materials and 15 different types of finishes. Once a design is decided upon, the company will work with clients on prototypes and ensure satisfaction before starting mass production. Partners in the manufacturing stream include Microsoft, Airbus, and Panasonic.

Why does Materialise (MTLS) Matter?

While the number of publicly-traded companies in the 3D printing sector has grown in recent years, Materialise’s unique business model helps set it apart from the competition. The company’s three distinct business lines serve a variety of customers. Through these three distinct revenue streams, the company is highly diversified compared to other 3D printing companies that focus on one or two niche areas. As a result of Materialise’s diversification, the risks and impacts of potential downturns in any one industry they serve are greatly reduced.

In addition to the diversification of services, the variety of methods used by Materialise is also another advantage that it holds over competition. While other companies depend on a select few types of 3D Printing technology for all their products and services, Materialise has been able to innovate and experiment with a variety of methods. Stereolithography, lasers intering, fused deposition modelling, and PolyJet technology are all different 3D printing methods that are compatible with Materialise software. As a result of this compatibility, different methods and materials can be chosen based on the needs of clients, allowing for greater customization and ultimately, higher quality products.

Materialise (MTLS) Prospects

Due to their decades of experience, Materialise has become an industry standard for many manufacturers of 3D printers. For this reason, the company is well-positioned to grow rapidly as the sector becomes more established. As mentioned previously, only 0.1% of manufacturing currently uses the 3D printing process. As the creator of industry-standard software for 3D printers, the rate of growth for the company should remain consistent as long as the sector as a whole continues to expand.

Materialise is able to maintain a spot at the top of the 3D printing industry due in large part to its innovation and ability to enter new sectors. For example, an investment into Ditto, an online eyewear try-on service, has been touted by many investors as an example of Materialise’s ability to adapt existing technologies to solve modern problems. Strategic investments and partnerships like this show that there will be more and more markets to enter as 3D printing technology becomes more mainstream and widely adopted.

Where to Buy Materialise (MTLS) Stocks

A broker that we recommend is Firstrade.

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Summary

With three decades of experience, Materialise’s software, medical, and material solutions make it an industry behemoth. While the company has already shown impressive growth in recent years, it could be argued that the 3D printing sector is still in its infancy. As this type of manufacturing process becomes more widely adopted, Materialise is very well positioned to scale up and enter emerging sectors where this technology could be applied.