3D Printers: Big Customers First, Consumer Market Later – 3D Systems Corporation (DDD), Stratasys, Ltd. (SSYS)

But this isn’t necessarily a bad thing. The first computers were owned by the government before moving into the corporate market. When the consumer market began to acquire computers the first ones rivaled some cars in cost. Yet the computer survived anyway and has led to the creation of some of the most valuable companies of all time. This historical perspective shows that 3D printers do not need to immediately take the consumer market by storm to survive; they just need to create awareness and use profits earned from corporate sales to continue development of future offerings.

So the question now is whether these companies are appropriately priced or whether they have bubble-style valuations. Below is a table comparing three top public 3D printing companies.

Earnings estimates sourced from Yahoo! Finance

Looking at the table we can see that 3D Systems Corporation (NYSE:DDD) and Stratasys, Ltd. (NASDAQ:SSYS) are not too richly valued, provided they can live up to earnings expectations. ExOne shares are more expensive on a forward P/E basis, but one must keep in mind that ExOne is far smaller than its two rivals, a position that carries its own advantages and disadvantages. Considering the great future potential of 3D printing, a P/E in the 20’s can be considered reasonable for an investment in either 3D Systems or Stratasys.

Printing the future

3D printers will not take over the consumer market overnight due to cost and technological constraints, but they don’t need to for 3D printer manufacturers to be successful. Demand from corporations and research institutions will fund the operations of 3D printer makers and allow them to grow earnings while building technology for mass market expansion. At less than 30 times earnings, the correction in 3D Systems Corporation (NYSE:DDD) and Stratasys, Ltd. (NASDAQ:SSYS) shares provides a good entry point for tech investors interested in this emerging technology.

The article 3D Printers: Big Customers First, Consumer Market Later originally appeared on Fool.com and is written by Alexander MacLennan.

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