GICS Sector : Industrials
Proto Labs, Inc., together with its subsidiaries, operates as an e-commerce driven digital manufacturer of custom prototypes and on-demand production parts in the worldwide.The company offers injection molding; computer numerical control machining; three-dimensional (3D) printing, which include stereolithography, selective laser sintering, direct metal laser sintering, multi jet fusion, polyjet, and carbon DLS processes; and sheet metal fabrication products, including quick-turn and e-commerce-enabled custom sheet metal parts.It serves developers and engineers, who use 3D computer-aided design software to design products across a range of end markets.
Proto Labs reported a strong third quarter with record revenue of $135.4 million, up 7.8% year-over-year, driven by increased demand in its U.S. CNC machining and sheet metal offerings, particularly in the aerospace and defense and industrial and commercial machinery end markets. The company's non-GAAP earnings per share came in at $0.47, beating estimates of $0.39. Gross margins improved by 110 basis points from the second to third quarter, driven by improvements in both factory and network margins.
Publication Date: Nov -29
The company's revenue growth was supported by a 15% year-over-year increase in revenue per customer, indicating a successful strategy of growing share of wallet among existing customers. However, the number of unique customers was down on a year-over-year basis, a trend that the company is working to reverse. Suresh Krishna, CEO, emphasized the company's focus on driving growth through new strategic initiatives, which will be shared in 2026.
Proto Labs saw significant improvements in its key performance indicators, including a 35% increase in customers utilizing both factory and network fulfillment in the last 12 months. The company expects revenue between $125 million and $133 million in the fourth quarter, implying 6% revenue growth year-over-year. Analysts estimate next year's revenue growth at 5.2%, which is slightly lower than the current year's growth rate.
With a P/E Ratio of 81.82 and an EV/EBITDA of 18.84, Proto Labs' valuation suggests that the market is pricing in a certain level of growth. The company's ROE of 2.23% and ROIC of 1.6% indicate that it is not generating exceptionally high returns on equity or invested capital. As the company continues to execute on its strategic initiatives, investors will be watching to see if it can sustain its growth momentum and improve its returns.
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Proto Labs' 2.5% growth in Injection Molding is driven by increasing demand for rapid prototyping and low-volume production, fueled by the rise of e-commerce and digital marketplaces. Additionally, advancements in 3D printing and CNC machining technologies are expanding the addressable market, while strategic acquisitions and investments in digital platforms enhance operational efficiency and customer experience.
Proto Labs' Computer Numerical Control (CNC) Machining growth of 2.8% is driven by increasing demand for rapid prototyping and low-volume production, adoption of digital manufacturing technologies, and expansion into new industries such as aerospace and medical devices. Additionally, investments in automation and process improvements have enhanced efficiency and capacity, supporting growth.
Proto Labs' 3D printing segment growth of 4.2% is driven by increasing adoption in production applications, expansion into new industries such as aerospace and healthcare, and rising demand for rapid prototyping and low-volume production. Additionally, advancements in technology, material development, and cost reductions are also contributing to the growth.
Proto Labs' Sheet Metal segment growth of 1.8% is driven by increasing demand for rapid prototyping and low-volume production from industries such as aerospace, automotive, and medical devices. Additionally, the company's investments in digital manufacturing technologies and expansion of its production capacity are contributing to the growth.
Proto Labs' 'Other' segment growth of 2.2% is driven by increasing demand for 3D printing and CNC machining services, expansion into new markets, and strategic partnerships. Additionally, the company's investments in digital manufacturing and e-commerce platforms have improved operational efficiency and enhanced customer experience, contributing to the segment's growth.
A manufacturing process for producing parts by injecting molten material into a mold.
A subtractive manufacturing process that uses computer-controlled machines to cut and shape metal and plastic parts.
An additive manufacturing process that creates parts layer by layer from a digital file.
A manufacturing process that involves cutting, bending, and assembling metal sheets to create custom parts.
A manufacturing process that creates soft, flexible, or rigid parts using polyurethane materials.
Proto Labs, Inc. has a moderate threat of substitutes due to the presence of alternative manufacturing technologies and materials.
Proto Labs, Inc. has a low bargaining power of customers due to its strong brand reputation and diversified customer base.
Proto Labs, Inc. has a moderate bargaining power of suppliers due to its dependence on a few key suppliers for raw materials.
Proto Labs, Inc. has a high threat of new entrants due to the increasing popularity of digital manufacturing and the ease of entry into the market.
Proto Labs, Inc. operates in a highly competitive industry with intense rivalry among established players, leading to a high intensity of rivalry.
| Value | |
|---|---|
| Debt Weight | 0.78% |
| Debt Cost | 10.73% |
| Equity Weight | 99.22% |
| Equity Cost | 10.73% |
| WACC | 10.73% |
| Leverage | 0.79% |
Value: 6.2
Growth: 6.6
Quality: 5.1
Yield: 0.0
Momentum: 7.0
Volatility: 6.3
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Value: 3.2
Growth: 3.9
Quality: 6.5
Yield: 0.0
Momentum: 9.5
Volatility: 5.3
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Value: 6.5
Growth: 0.9
Quality: 5.6
Yield: 1.0
Momentum: 9.0
Volatility: 4.0
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Value: 7.1
Growth: 7.4
Quality: 5.8
Yield: 0.0
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Volatility: 3.7
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Value: 5.5
Growth: 1.0
Quality: 2.4
Yield: 2.0
Momentum: 6.5
Volatility: 5.3
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Value: 10.0
Growth: 3.7
Quality: 4.0
Yield: 0.0
Momentum: 1.5
Volatility: 0.0
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