As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the custom parts manufacturing industry, including Desktop Metal (NYSE: DM) and its peers.

Onshoring and inventory management–themes that grew in focus after COVID wreaked havoc on global supply chains–are tailwinds for companies that combine economies of scale with reliable service. Many in the space have adopted 3D printing to efficiently address the need for bespoke parts and components, but all companies are still at the whim of economic cycles. For example, consumer spending and interest rates can greatly impact the industrial production that drives demand for these companies’ offerings.

The 5 custom parts manufacturing stocks we track reported a mixed Q2. As a group, revenues missed analysts’ consensus estimates by 4.1% while next quarter’s revenue guidance was 0.8% below.

In light of this news, share prices of the companies have held steady as they are up 3.1% on average since the latest earnings results.

Weakest Q2: Desktop Metal (NYSE: DM)

Originating from a research lab at MIT, Desktop Metal (NYSE: DM) offers 3D printers, production materials, and software to many industries.

Desktop Metal reported revenues of $38.93 million, down 26.9% year on year. This print fell short of analysts’ expectations by 14.4%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ EBITDA and EPS estimates.

“Since the beginning of 2022, Desktop Metal has worked tirelessly to align our cost structure with macroeconomic realities, making hard decisions about the business. By the end of Q1 we had delivered nine quarters of non-GAAP opex reduction and brought our cash burn down dramatically. I am proud of the progress we have shown,” said Ric Fulop, Founder and CEO of Desktop Metal.

Desktop Metal delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. Unsurprisingly, the stock is down 20.2% since reporting and currently trades at $3.92.

Read our full report on Desktop Metal here, it’s free.

Best Q2: Proto Labs (NYSE: PRLB)

Pioneering the concept of online quoting and manufacturing for custom prototypes and low-volume production parts, Proto Labs (NYSE: PRLB) offers injection molding, 3D printing, and sheet metal fabrication for manufacturers in various industries.

Proto Labs reported revenues of $125.6 million, down 3.9% year on year, outperforming analysts’ expectations by 3.5%. The business had an exceptional quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.

Proto Labs scored the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 55.8% since reporting. It currently trades at $42.68.

Is now the time to buy Proto Labs? Access our full analysis of the earnings results here, it’s free.

Markforged (NYSE: MKFG)

Beginning as a start-up at SolidWorks World–an annual design and engineering conference, Markforged (NYSE: MKFG) offers 3D printers and softwares to manufacturers of various industries.

Markforged reported revenues of $20.48 million, up 2% year on year, falling short of analysts’ expectations by 9.1%. It was a softer quarter, leaving some shareholders looking for more.

As expected, the stock is down 15.1% since the results and currently trades at $3.79.

Read our full analysis of Markforged’s results here.

Stratasys (NASDAQ: SSYS)

Born from the Founder’s idea of making a toy frog with a glue gun, Stratasys (NASDAQ: SSYS) offers 3D printers and related materials, software, and services to many industries.

Stratasys reported revenues of $140 million, down 13.6% year on year. This number was in line with analysts’ expectations. It was an exceptional quarter as it also logged an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.

Stratasys achieved the highest full-year guidance raise among its peers. The stock is up 9.7% since reporting and currently trades at $9.20.

Read our full, actionable report on Stratasys here, it’s free.

3D Systems (NYSE: DDD)

Founded by the inventor of stereolithography, 3D Systems (NYSE: DDD) engineers, manufactures, and sells 3D printers and other related products to the aerospace, automotive, healthcare, and consumer goods industries.

3D Systems reported revenues of $112.9 million, down 8.8% year on year. This print lagged analysts' expectations by 0.6%. It was a slower quarter as it also recorded a significant miss of analysts’ adjusted operating income estimates.

3D Systems had the weakest full-year guidance update among its peers. The stock is down 14.7% since reporting and currently trades at $2.89.

Read our full, actionable report on 3D Systems here, it’s free.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September, a quarter in November) have kept 2024 stock markets frothy, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there's still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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