This week we expect voxeljet AG (VJET) to price above the range and trade up from there. 3D printing stocks have been red hot and there is simply more demand than supply right now for new names. As shown in the table included below market leaders 3D Systems (DDD) and Stratasys (SSYS) are up 106% and 67% in the past year respectively. More speculative names in the group have gone up even more.
We’ve had two other IPO deals in this space with ProtoLabs (PRLB) which is really more of a rapid manufacturing play and ExOne (XONE) which is a pure 3D printing play. ProtoLabs priced above the range in February of 2012 at $16, opened at $25 and is now changing hands at $78. ExOne (XONE) priced above the range at $18 in January of 2013, opened at $24 and now trades at $54.
voxeljet is an earlier stage company so it’s not directly comparable based on price but if we used pricing as a guide we’d expect to see this deal price at $18 to $20, open around $25-30 and hopefully trade up from there. However at the mid-point of the current range VJET is already valued at over 20x sales versus 12x to 19x for the other companies and they are growing much faster than VJET right now. So investors should be a little careful with this name if they chase it post pricing.
Here are a few excerpts from the transcript of the voxeljet AG roadshow presentation:
The reason why we use voxeljet printers is for their capability to provide us with such large-scale plastic parts and because of their capacity for such brilliant detail. And recently we got a third-scale Aston Martin DB-5 using a VX1000 to create a model for the latest Bond film “Skyfall.”
This is where we are today. We are active in two segments. We do business in systems and services. As you saw from the video, we are offering high-speed, large-format printers with the highest output rate in the industry, the largest build envelopes in the industry and with the use of industrial grade materials.
We use that technology in our service segment to offer affordable on-demand access. With that we are able to lower the cost of entry for our customers and to use the services also as a channel for our system segments.
With these two segments, we serve the large and growing additive manufacturing market with very nice growth rates. You see it here on the slide — between 20% and 25%. We believe we can grow faster than the industry because we address markets like the metal casting industry with a disruptive technology. We believe we can grow in the range of 50%.
It’s a powder-based technology. In principle, we take a particulate material. We lay down that material on a build platform and treat a liquid agent on top of that powder. Once the liquid penetrates the powder, the powder becomes bonded. We repeat those two steps. As we reach the final height of the build, then all of the remaining unprinted powder stays loose. Finally we can remove this powder and we’ve got the finished part.
We can print single pieces in a big envelope — which nobody else can do. We did pump houses — very complex pieces — using the entire build envelope on that specific machine. Or we can use the build envelope to make multiple pieces in one run. For instance, we’re also using this type of machine to print several hundred turbocharger cores within a single print.
This leads us to our integrated business model, which starts, in most cases, with the purchase of a single piece in our service environment. As the customer’s needs develop and his demands grow he normally comes back and orders more pieces. Over time, he comes to a point where he normally sees a need to have the machine in-house.
An interesting point is even then, once installed in-house, the stream of contacts doesn’t break. We normally have needs from the customer for over-capacity, or we see that he needs larger-scale parts, so he comes back for that. We then offer new and other materials to the customer. It’s a constant stream between services and systems.
Currently we have on our R&D team about 50 active projects in various stages. Some of them are becoming products quite quickly — ceramics, for instance. This is something coming quite soon where we can do custom dishware. We can do individual bathroom equipment, but at the very least we can do also the technical ceramics. For instance, we are working with a customer dealing in catalysts — we are able to print catalysts for them. Filters and other ceramic elements are also interesting.
Also interesting here on this page is 3D Systems — the main player in additive manufacturing. 3D Systems is operating a system of voxeljet in their facility in Seattle where they do prints for the investment casting industry. They are a heavy user of our machine there.
We’ve also posted the voxeljet AG IPO slidedeck for reference.
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