We came across a bullish thesis on Materialise NV (MTLS) on Substack by Unemployed Value Degen and Industrial Tech Stock Analyst. In this article, we will summarize the bulls’ thesis on MTLS. Materialise NV (MTLS)’s share was trading at $9.62 as of Feb 14th. MTLS’s trailing P/E was 54.45 according to Yahoo Finance.
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Materialise (MTLS), a Belgium-based leader in additive manufacturing, has seen its stock nearly double since November, reflecting growing investor enthusiasm for 3D printing. Positioned at the center of the 3D printing ecosystem, MTLS is the leading software provider in the space, setting it apart from competitors like 3D Systems (DDD) and Stratasys (SSYS), which generate more revenue from manufacturing. While rapid prototyping and custom medical devices have long been primary use cases, technological advancements have enabled 3D printing to move beyond plastic prototypes and into end-product manufacturing. This transition, exemplified by Powder Bed Fusion technology used for titanium hinges in foldable smartphones, supports industry projections of the additive manufacturing market doubling every four years.
MTLS’s software leadership, despite contributing less than 20% of total revenue, offers a strong competitive moat and the potential for higher valuation multiples than its peers. With additive manufacturing expected to grow at a 19% CAGR, the company is strategically positioned to benefit as the sector expands. Beyond its European base, MTLS is aggressively expanding in the U.S., a significant growth opportunity. Management’s conservative approach contrasts with U.S. tech firms that previously prioritized growth over profitability. MTLS has maintained steady growth, with a strong balance sheet featuring minimal debt and $120 million in cash on hand.
Despite recent revenue growth of 14% and EBITDA margins of 12%, MTLS remains undervalued relative to its long-term potential. The company’s stock is currently trading at a price-to-sales ratio of 2.0x—low compared to tech companies that have surged due to AI-related narratives. Although management has forecasted near-term weakness due to capex investments for U.S. expansion, these expenditures support long-term growth. A temporary pullback in the stock price is possible, but broader enthusiasm for 3D printing and its intersection with AI could drive a significant revaluation.
MTLS also faces a potential sum-of-the-parts (SOTP) discount. Its medical segment, growing at 20% annually with 26% EBITDA margins, could command a higher multiple if separated from the manufacturing business. A spinoff or sale of the manufacturing segment could unlock value, leading to a multiple rerating. Alternatively, if manufacturing rebounds following a recent downturn, MTLS’s overall valuation could increase even without AI-driven excitement.
With strong positioning in the sector, resilient financials, and potential catalysts for revaluation, MTLS presents a compelling investment opportunity. Even without speculative AI hype, the company could reach $23.47 by 2026, with substantially more upside if additive manufacturing becomes a major AI beneficiary.
Materialise NV (MTLS) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 6 hedge fund portfolios held MTLS at the end of the third quarter which was 5 in the previous quarter. While we acknowledge the risk and potential of MTLS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MTLS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.