Although there are only three publicly traded companies that manufacture 3D printers today, there is little doubt that 3D printing is the wave of the future. Some believe that 3D printing is closer to science fiction than reality, but 3D printing is becoming a true vibrant reality. I firmly believe that within a decade, 3D printing will change our lives in the same way that desktop computers changed our lives during the past two decades.
3D printers create products that were designed using 3D modeling software using a layer-by-layer printing process from liquid or powered material. Up until recently, the technology has primarily been in use by aerospace, auto and medical consumers. The odd thing is that 3D printing technology has been around for over 20 years, though it has only recently started to hit the mainstream.
Many believe that 3D printing stocks will soar in the next few years. Even U.S. President Barack Obama suggested in a recent speech that the high-tech industry and particularly the 3D printing industry is going to be the next growth engine for the American economy.
To prepare, let’s examine the most important players in the 3D printing field.
The leader – Stratasys, Ltd. (NASDAQ:SSYS)
Stratasys, Ltd. (NASDAQ:SSYS) is a worldwide leader in manufacturing three-dimensional printers. The company’s products are used by designers, engineers and manufactures to visualize, verify and communicate product designs. Stratasys, Ltd. (NASDAQ:SSYS)’ fundamentals are firm, its last quarter operating income of $29 million led to revenue of $21 million. In addition, the company delivered over 30% sales growth rate for the past three years. The company is solid and profitable, and it is growing quickly. Historically, the company managed to beat earnings estimates in the last four consecutive quarters.
Stratasys, Ltd. (NASDAQ:SSYS) has no debt and $150 million in cash, which allows it to look for acquisitions of companies such as privately-held Objet. The combined company value of $3.1 billion will put the company in a better position to compete against rivals, and it is poised to be the leader in the fast-growing 3D printing and digital manufacturing industry. Furthermore, the company expects 20% annual revenue growth, which is quite an impressive growth rate for a company this size.
In a recent interview David Reis, Stratasys’ CEO, predicted that ten years from now there is not going to be a single school in the western world not using a 3D printer. By all means, a revolution is ahead of us.
The follower – 3D Systems Corporation (NYSE:DDD)
3D Systems Corporation (NYSE:DDD) develops, manufactures and markets solid imaging systems designed to rapidly produce three-dimensional objects from computer-aided design and manufacturing-generated solid or surface data. 3D Systems Corporation (NYSE:DDD) focus on manufacturing small, low-cost 3D printers. The strategy has proved itself, the company has been profitable since May 2011, when it has first listed on the NYSE.
It appears that 3D Systems Corporation (NYSE:DDD)’ competitive advantage over its peers lies in its usability and affordability. 3D Systems Corporation (NYSE:DDD) markets a variety of printers such as the Cube 3D model, which is priced around $1,200. In comparison, Stratasys cheapest models are priced at around $10,000 as Stratasys is clearly aiming at the very high end of the market. 3D Systems Corporation (NYSE:DDD)’ Cube 3D takes an intuitive approach, and its design specifications have been tailored for users of all ages and levels.
The small but wise – ExOne Co (NASDAQ:XONE)
In a recent interview with Reuters, ExOne Co (NASDAQ:XONE)’s CEO Kent Rockwell said that he expects the company to exceed a 50% gross margin within three years. He also indicated that the company intends to open new production service centers as part of an expansion in emerging markets. The company is aiming to reach annual revenue of $100 million within three years, about three times 2012 revenue of $28 million.
The foolish bottom line
I am bullish on the three stocks operating in a high-growth industry. 3D printing is a useful technology, and I expect it will reach almost every household and business within a decade. The three stocks mentioned have demonstrated real growing revenues and profits on a consistent basis. Furthermore, the 3D printing market is still in the early stages of growth and more companies are going to enter the market and benefit from the trend. There is virtually no limit on what can be printed from these types of printers. The 3D printing industry is a classic example of the saying “the trend is your friend,” but in this case the trend is here to stay for the long haul.
The article These 3D Printing Companies Are Printing Money originally appeared on Fool.com is written by Yaniv Hirsch.
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