If you’re looking to hop onto an emerging hyper-growth megatrend, you really need to check out 3D Systems (NYSE:DDD). Sure, there’s risk involved in owning DDD stock, but the long-term rewards could be spectacular.
Boldly (but not incorrectly), InvestorPlace analyst Luke Lango recently called 3D printing the “Fourth Industrial Revolution.” To that, I would add that bio-printing is the latest phase of that revolution.
But what exactly is bio-printing? And how it is connected to DDD stock? We’ll touch upon these burning questions in a second. First, however, we should consider just how far this stock could run — and whether there’s a reasonable chance of it getting there.
A Closer Look at DDD Stock
Going back a decade or so, DDD stock could have been purchased for around $10. However, the next thing you know, a wild buying frenzy ensued in 2012.
I call this the Eiffel Tower pattern — when a stock goes vertically upwards, then turns around and goes down at the same speed. Thus, DDD stock shot up above $90 in late 2013 only to plummet down to around $8 in early 2016. Suffice it to say, this stock has powerful rally potential. But it can also punish price chasers mercilessly.
Fast-forward to the end of 2020 and DDD stock was back at $10 and change. Hence, there was essentially a “lost decade,” with a rollercoaster ride along the way. In that same vein, recently a mini-rollercoaster ride came, as the stock sprinted to as high as $56 in February 2021 only to decline again, landing around $34 today.
My point? When it comes to investing in 3D Systems, you’d better be ready for potentially huge rewards and a sizable dose of risk.
A Decidedly Human Application
There’s a pretty good chance that you’ve heard about 3D printing being applied to materials like plastics, ceramics and metals. But that’s just the tip of iceberg — 3D printing can be applied to a broad variety of uses. And it’s big business, as the data reveals.
If you need evidence of this, just take a glance at 3D Systems’ first-quarter fiscal results. President and CEO Jeffrey Graves celebrated the company’s nearly 8% year-over-year (YOY) revenue growth, noting the following: “When we exclude the revenue from […] divested [non-core] businesses, organic revenue grew nearly 17%.”
Further, Graves added that 3D Systems’ healthcare business posted a 39% YOY increase with “strength in both dental and medical applications.”
Sure, the CEO and his company could coast on these accomplishments. Yet, there are other niches to conquer — including commercial bio-printing.
This is where 3D printing has been given a decidedly human application. Instead of depositing artificial materials, bio-printers deliver biological entities: cells, tissues, blood vessels and even bone (or at least, its artificial equivalent).
Soft Tissue, Hard Science
Now, I’m not going to say that 3D Systems is jumping head-first into bio-printing. Rather, the company is testing the waters via a collaboration with Collplant Biotechnologies (NASDAQ:CLGN).
Reportedly, these two businesses signed a co-development agreement for a 3D bio-printed regenerative “soft tissue matrix,” which is to be used in “breast reconstruction procedures in combination with an implant.”
There’s a vast addressable market here, but more importantly, the health-related outcomes could be significant. According to the World Health Organization (via 3D Systems), 2.3 million women around the world were diagnosed with breast cancer in 2020. Moreover, a large majority of these women required “partial or full removal of breast tissue.”
Current breast-reconstruction procedures typically use soft-tissue matrices that are derived from either human cadavers or animals. The advent of bio-printing, though — and the partnership between 3D Systems and Collplant — offers the hope of a much more efficient alternative.
Graves eloquently articulated the enormous potential value of this collaboration, which reaches far beyond profits:
“[W]e’re exploring a novel application that could offer a new reconstruction treatment for breast cancer survivors. It’s inspiring to be involved in a project that has the potential to have such a positive impact on the human condition.”
Clearly, a foray into bio-printing could mean big things for DDD stock.
The Bottom Line on DDD Stock
Adding DDD stock to your portfolio could substantially increase its volatility – there’s no denying this.
But this is also a simple way of looking at it. In my view, DDD could also add an element of diversification, along with a sense of adventure, to any portfolio.
That view comes from knowing 3D Systems is relentlessly pushing the boundaries of 3D printing science — and, quite possibly, changing health outcomes for the better.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.