3D Printing in Vogue: 4 MedTech Stocks to Keep an Eye On – March 29, 2018


Technological progress has been a constant for decades, making lives easier. Currently, the global mantra to success is adapting and upgrading to trending technologies.

The latest craze in the digital world is 3D printing, opening up new avenues in different spheres of application, starting from automobiles to healthcare. Also known as additive manufacturing, 3D printing is the process of turning a digital model into a solid three-dimensional physical object by adding material layer by layer (per an article on 3D Hubs).

From Reebok’s latest Liquid Floatride Run footwear, featuring 3D printed laces, to the switching of bigwigs like Porsche and Bugatti to 3D printing for manufacturing rare or complex parts, the phenomenon has spread far and wide. Research firm Markets and Markets expects the 3D printing market to grow to a value of $32.78 billion between 2017 and 2023, at a CAGR of 25.76%.

3D printing has also received a warm response from the MedTech space within healthcare. Notably, research firm Future Market Insights expects the global 3D printed medical devices market to see a CAGR of 18.1% between 2017 and 2027.

Let’s delve into details on how 3D printing has been creating new opportunities in MedTech for investors who are keen on putting their money in the healthcare space for longer-term gains.

3D Printing Changes MedTech Landscape

Growing prominence of innovative 3D printing solutions has lent a Midas touch to the MedTech space. The FDA as well as healthcare professionals are fast adopting 3D technologies to enhance long-term patient outcomes. We encouragingly note that, Materialise NV (MTLS Free Report) was the first company to receive FDA approval for software designed for 3D printing anatomical models for diagnostic use.

While all major sub-industries are trying to utilize their resources to come up with the best in the burgeoning 3D printing market, we have zeroed in on three that are making the most of the trend.

Orthopedic Implants

Orthopedic implant and device manufacturers are switching to 3D printing techniques to cater to the rapidly growing demand for customized implantable devices. Through 3D printing, manufacturers are being able to develop implants of customized sizes and shapes in a short time, improving efficacy and lowering the overall cost of surgeries.

Research firm Future Market Insights expects the orthopedic implants market to reach a worth of around $970 million between 2017 and 2027, at a CAGR of 19.2% (according to a report published by CISION PR Newswire). Here, we appreciate Zimmer Biomet Holdings, Inc.’s (ZBH Free Report) FDA-approved Unite3D Bridge Fixation System. Quebec City-based Bodycad and Texas-based 4WEB Medical are some of the leading names in the 3D printed implant technology space.

Hearing Aid Devices

3D printing is fast taking over the hearing aid devices market, which is expected to see a CAGR of 5.1% between 2017 and 2023 (per a OrbisResearch.com report published by Reuters). 3D printing enables manufacturers to develop devices based on 3D images of defective ear canals. Sonova Holding AG — a leading provider of hearing solutions — has been actively using 3D printing to come up with next-generation hearing aid devices. The company’s customized titanium 3D printed hearing aid deserves a mention here.

Dental Implants

3D printing is also gaining popularity in the dental industry as it allows dentists to carry out procedures with more precision and efficiency, saving patients excess trauma. Notably, dental 3D printing is a process of creating three dimensional solid dental models such as implants, surgical guides, braces, dentures, crowns and bridges. Research firm Transparency Market Research expects the global dental 3D printing market to see a 16.5% CAGR from 2017 to 2025, reaching a value of $3,427.1 million.

A global leader in high-accuracy dental 3D printers and materials — EnvisionTech — has been actively strengthening its hold in the niche market. The company recently announced the launch of two orthodontic materials at the LMT Lab Day Chicago 2018.

Stocks in Focus

We have selected four companies, which we believe are well poised to provide impressive long-term returns banking on the 3D printing trend.

Stryker Corporation (SYK Free Report) has been one of the early adopters of the 3D printing technology. The company’s FDA-approved Tritanium TL Curved Posterior Lumbar Cage is a 3D-printed interbody fusion cage intended for use as an aid in lumbar fixation.

This Zacks Rank #3 (Hold) company has a long-term earnings growth rate of 9.8%.  The current-quarter estimate revision trend for the stock has been encouraging with four estimates moving upward, compared to two downward movement in the past two months. Resultantly, the Zacks Consensus Estimate increased around 0.6% to $1.60 per share. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stryker’s share price movement over the past three months has been favorable. The company yielded a return of almost 2%, better than the industry‘s 1.8%.

 

Orthofix International N.V. (OFIX Free Report) recently announced FDA approval and U.S. limited market launch of the FORZA XP Expandable Spacer System. This system consists of 3D printed porous titanium endplates which enable the patient’s bone to grow into the porous plate.

This Zacks Rank #3 company has a long-term earnings growth rate of 9.7%. The company has delivered positive earnings surprises in two of the trailing four quarters, the average earnings beat being 1.6%.

Over the past month, shares of Orthofix have outperformed the industry it belongs to. The stock has gained 4.2% compared with the industry’s 0.9% rise.

 

ConforMIS, Inc. (CFMS Free Report) is currently using its iFit Image-to-Implant technology printing platform to manufacture iJigs. Furthermore, ConforMIS is planning to use the same for making certain components of its customized knee replacement implants. Notably, the company received FDA approval to use its iFit 3D printing technology to manufacture the metal femoral implant component for its iTotal CR using direct metal laser sintering.

This Zacks Rank #3 company has a long-term earnings growth rate of 9.7% and a Growth Score of B. The current-year estimate revision trend for the stock has been encouraging with five estimates moving upward, compared to no downward movement in the past two months. The company has delivered positive earnings surprises in three of the trailing four quarters, the average earnings beat being 8.4%.

Over the past month, shares of ConforMIS have outperformed the industry it belongs to. The stock has gained 11.6% compared with the industry 1.4% rise.

 

Going by an article on stratasys, Medtronic plc (MDT Free Report) adopted the 3D printing technology for concepts & testing, technological development, rapid prototyping, and anatomical modeling development & test fixtures. The application of this hi-end technology has resulted in lower project costs and faster processing time.

This Zacks Rank #3 company has a long-term earnings growth rate of 7.5%. The company has delivered positive earnings surprise in all of the trailing four quarters, the average earnings beat being 3.5%.

Over the past month, shares of Medtronic have outperformed the S&P 500 market. The stock has gained 0.2% compared with the S&P 500’s 2.6% decline.

 

Conclusion

As they say, strike when the iron is hot. This is the opportune time to cash in on the rapidly-rising 3D printing trend.

Investor Alert: Breakthroughs Pending

A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.

Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.

Click here to see them >>





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