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Proto Labs Whisper

Proto Labs Whisper
 

Research Question: Can Proto Labs meet high growth expectations through mostly existing customer penetration?

Companies Covered: Proto Labs (PRLB)

Report Available: October 22, 2013

 

Blueshift’s initial research shows PRLB continuing its revenue growth through penetration of existing customers, but facing challenges as its new customer growth has flattened and competition from big players, in-house development, and localized 3-D printing services has increased.

 

Observations

  1. PRLB delivered a 33% increase in revenue year-over-year, and the company said each global segment is growing. PRLB also equates revenue growth to greater penetration into existing customers, as it saw new customer growth flatten. The number of developers the company works with has grown 22% year-over-year, with the revenue generated from each individual developer increasing 8%.
  2. A significant amount of PRLB’s business advantage involves leveraging its efficient logistical apparatus in order to deliver the final product to customers quickly. The recent entrance of UPS into 3-D printing represents a disruption to PRLB’s existing and potential new customer base. Additionally, companies that source localized 3-D printing services, including makexyz, threaten PRLB’s existing market share, which depends upon a high volume, low margin model.
  3. As the cost of 3-D printing becomes more affordable due to patent expirations and increased price competition, many companies are likely to internally source their own 3-D printing needs, like GE has done. Many of PRLB’s existing customers are large corporate entities with substantial resources to devote to building out their internal 3-D printing capacity. Internal 3-D printing, even on a small scale, would limit the use of PRLB’s “First Cut” division, which represents one-third of the company’s revenue, and involves a limited product run, usually fewer than 10 parts.

 

In order to assess PRLB’s existing and new customer penetration and retention, Blueshift will gather data and issue a market research report from independent sources in the following areas: PRLB’s existing customers, non-PRLB customers, proprietors of local 3-D printing centers, industrial design professors at the university level, and industry specialists.

 

To see other ideas Blueshift Research is currently working on, please click here.