As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at custom parts manufacturing stocks, starting with Proto Labs (NYSE:PRLB).

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 4 custom parts manufacturing stocks we track reported a softer Q2. As a group, revenues missed analysts’ consensus estimates by 5.1% while next quarter’s revenue guidance was 6.7% below.

Inflation progressed towards the Fed's 2% goal recently, leading the Fed to reduce its policy rate by 50bps (half a percent or 0.5%) in September 2024. This is the first cut in four years. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be debating whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.

Amidst this news, custom parts manufacturing stocks have had a rough stretch. On average, share prices are down 11.3% since the latest earnings results.

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, up 2.8% year on year. This print was in line with analysts’ expectations, but overall, it was a decent quarter for the company with strong earnings guidance for the next quarter.

"We executed well through the first half of 2024 despite operating in a challenging macroeconomic environment,” said Rob Bodor, President and Chief Executive Officer.

Proto Labs pulled off the fastest revenue growth of the whole group. Even though it had a great quarter relative to its peers, the market seems discontent with the results. The stock is down 27.8% since reporting and currently trades at $1.95.

Read our full report on Proto Labs 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 $21.69 million, down 14.8% year on year, in line with analysts’ expectations. It was unfortunately a slower quarter with full-year revenue guidance missing analysts’ expectations.

Markforged pulled off the biggest analyst estimates beat and highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 27.8% since reporting. It currently trades at $1.95.

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

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, falling short of analysts’ expectations by 14.4%. It was a disappointing quarter as it posted a miss of analysts’ earnings estimates.

Desktop Metal delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 4.5% since the results and currently trades at $4.69.

Read our full analysis of Desktop Metal’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 $138 million, down 13.6% year on year. This number came in 5.7% below analysts' expectations. Overall, it was a disappointing quarter as it also recorded full-year revenue guidance missing analysts’ expectations and underwhelming earnings guidance for the full year.

Stratasys had the weakest full-year guidance update among its peers. The stock is down 2.5% since reporting and currently trades at $7.49.

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

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