William Blair initiated research coverage of Velo3D, Inc. (VLD $8.55). Velo3D produces metal additive manufacturing systems that employ a proprietary printing process to provide engineers with unprecedented design freedom for metal parts. The company offers three metal printing systems, the Sapphire, Sapphire 1MZ, and Sapphire XC. Its system includes design processing and quality analysis software.
Analyst Brian Drab estimated the company to generate 2021 revenue growth of 27%, with revenue slightly above $24 million. For 2022, he forecast revenue to grow 254%, to about $85 million, driven by the introduction of Velo3D’s Sapphire XC system, and in 2023, he forecast revenue growth of 84%, to around $156 million.
“Velo3D has developed metal 3D printing technology that removes design constraints associated with incumbent 3D printing systems,” Drab said. “By removing the need for support structures in the part build, Velo3D can print parts that were unprintable and unmanufacturable previously. This breakthrough manufacturing process is gaining traction. Following the shipment of the first commercial unit in 2018, Velo3D shipped nine more machines in 2019, 13 in 2020, and will likely ship well over 20 in 2021. The order book suggests 50-60 could ship in 2022.”
Drab continued, “We expect Velo3D’s growth to come from taking share of the high-value metal parts market in general, rather than competing directly with incumbent 3D printing technologies. Velo3D’s growth should come largely from 1) the creation of a new market by unlocking design possibilities and 2) the manufacture of existing parts without the need to make accommodations for 3D printing. We see a large MRO opportunity for Velo3D, particularly in the aerospace and energy industries.”
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