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HP (HPQ) Taps Growing Orthotics Market With 3D Printing

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HP Inc. HPQ recently announced a collaboration with Go 4-D to modernize orthotics. This alliance will enable Go 4-D to make cost-effective customized orthotics using HP Jet Fusion 3D printing systems.  

As a result of this tie-up, HP’s FitStation platform will be available across the North American medical market via Go 4-D.

The FitStation platform offers a 3D foot scanning and gait analysis to better understand customer needs. It also enables 3D printed user-friendly orthotics using the statistics from a client’s unique biomechanics.

We believe that HP, currently owning a 6% share in the 3D printing market, is poised well on capitalizing the prospects of the 3D printing business as well as the growing orthotics market, driven by its continuous product launches and innovations.

Orthotic devices are used to treat musculoskeletal abnormalities and reduce discomfort as well as improve posture. Conventional orthotic devices do not provide any concentration analysis or stress loading information to lend optimal results, experience and comfort to affected patients. This calls for modernization of orthotics with the incorporation of 3D printing technology, which HP seems to cash in on.

Demand for Non-Surgical Treatments Drives Growth

Per a recent report by Statista, the North American foot orthotic insoles market is projected to grow above $1.7 billion by 2022. Moreover, from a global viewpoint, orthopedic orthotics market — valued at $3,130 million in 2016 — is expected to witness a CAGR of 5.8% from 2017 to 2023, per ResearchAndMarkets.

The orthotics market is expanding at a relatively higher growth rate as the frequency of neuromuscular and musculoskeletal disorders plus injury cases have increased. This uptick is also driven by high digitization of pain management methods and increased demand for non-surgical treatment.

The new 3D printed custom orthotics, to be jointly produced by HP and Go 4-D, will aim at providing flexibility and segmental control at the exact point of discomfort.

Strategic Steps to Expand Footprint in 3D Printing

HP has been gaining traction in the 3D printing market, courtesy of its innovations and a broadening portfolio. In fiscal 2017, the company earned 36% of revenues from its printing business including 3D printing solutions.

HP Inc. Revenue (TTM)

HP Inc. Revenue (TTM) | HP Inc. Quote

Last year, HP launched Jet Fusion 3D Printing Solution in a bid to establish a stronger presence in the said market.

It recently launched an advanced 3D printing technology — HP Metal Jet — that aids cost-effective high volume manufacturing of production-grade metal parts. The Metal Jet Production Service was also unveiled simultaneously, allowing customers to quickly imitate new 3D part designs, produce the final parts and incorporate the HP Metal Jet into their future production plans.

Zacks Rank & Stocks to Consider

HP currently has a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader Computer and Technology sector are Fortinet, Inc. FTNT, Vishay Intertechnology, Inc. VSH and Radware Ltd. RDWR, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Fortinet, Vishay and Radware is pegged at 16.8%, 9.16% and 19%, respectively.

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