3D Systems Corporation (DDD), Stratasys, Ltd. (SYSS): Should You Buy Into 3D Printing?

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Beginning in the late 1980’s, 3D printing has been around much longer than most people think. Over the past few years advances in technology, decreased costs, and larger demand has brought 3D into the eyes of investors. 3D printing is providing lots of hype, with potential uses in many industries including aerospace, automobile, construction, and maybe even medicine. With only a handful of public companies now is a good time to get in on the hype of 3D printing. Revenue from the industry comes from manufacturing products in-house, building printers for customers, services on printers, selling materials, and now even manufacturing personal printers. Forecasts suggest that by 2016 3D printing could be a $3 billion industry, growing at about 15% each year.

3D Systems Corporation (NYSE:DDD)3D Systems Corporation (NYSE:DDD)
The name says it all. 3D Systems Corporation is one of the leading innovators of the 3D printing revolution. In 1986 3D Systems founder Chuck Hull developed and patented the system of stereolithography. Twenty seven years later 3D is now a growing company with a market cap over $3 billion. 3D offers both professional and individual household printers. They just launched their first personal printer, The Cube, in 2012 which sells for around $1,300 each. In 2011 3D posted revenue of $230 million, up from $160 million in 2010. EPS follows the same trend, increasing from $0.44 in 2010 to $0.72 in 2011. 2012 Q4 earnings are scheduled to be released on the Feb. 25, but analysts are expecting the trend of increased revenue to continue. Trading at around 99 P/E, buying 3D is an expensive purchase right now, but 3D is currently the leader of the market and is still generating momentum by targeting households and small businesses to buy their products.

Stratasys, Ltd. (NASDAQ:SSYS)
Founded in 1989, Stratasys, Ltd. manufacturers in-office prototyping and digital manufacturing printers for various companies. Stratasys represents the other side of the 3D printing market by supplying large industrial companies. Like 3D Systems, Stratasys has been increasing revenue and EPS for the past few years. In 2010 revenue was $117 million and EPS was 0.45 per share. In 2011 revenue and EPS were $155 million and 0.99, respectively. Earnings will be released in early March, but 2012 should be another year of growth. Stratasys management has also done a good job, with the company holding zero debt as of the latest quarter, something 3D does not have. In December of 2012 Stratasys merged with Israel-based Objet Geometries. Objet has almost 50 patents revolving around 3D printing. Objet offers a large base of 3D printers to add to Stratasys and access to markets in the Middle East and Asia. The $121 million in revenue that Objet brought in in 2011 also will help Stratasys catch up to 3D Systems.

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