3D Systems Corporation (NYSE:DDD) is at the leading edge of a disruptive technological revolution, with the broadest portfolio of 3-D printers in the industry. However, despite years of earnings growth, 3D Systems’ share price has risen even faster, and today the company sports a dizzying valuation. To help investors decide whether the future of additive manufacturing is bright enough to justify the lofty price tag on the company’s shares, The Motley Fool has compiled a premium research report on whether 3D Systems is a buy right now. In our report, we take a close look at 3D Systems’ opportunities, risks, and critical factors for growth. You’ll also find reasons to buy or sell, and receive a full year of analyst updates with the report. To start reading, simply click here now for instant access.
Isaac Pino: Hey, Fools, I’m Isaac Pino covering the Industrials and Consumer Goods sector here at The Motley Fool. Today I’m joined by Blake Bos, a special guest.
We’re talking about 3D printing, a really niche but exciting subsector of industrials and manufacturing, perhaps. Blake, you recently went to the Patent Trademark show, I believe.
Blake Bos: Yeah. It was an event they put on for 3D printing companies to go to the Patent Trade Office and speak with the patent folks there and give them exposure to the industry and help them better understand it. There were a lot of demonstrations as well.
Isaac: OK. Of course it’s an industry that’s starting to really just take root. We’re not even sure exactly what software is going to be built in the future, but we know that at some point patents are going to be involved with producing everyday items that we use, and also some perhaps that will be created in the future.
I want to understand, as a consumer, what your thoughts were on what you saw at the show. One thing you did see was some of the actual machines in action. That sounds really interesting to me. What were your takeaways?
Blake: The show was great to go to. I think it’s good for investors, if you have the opportunity to go to things like this because it really provides a unique perspective, a big-picture perspective. You’ve seen 3D printing, a year ago nobody really knew about 3D printing, investors.
Now it’s this vogue thing. You’ve got to watch out when things get there. It’s nice to take a step back and actually look at the businesses and what the operating environment was.
At the Patent Trade Show Office, my big takeaways were that it’s looking like the consumer market, as far as household printers — like the 3D Systems Cube Printer, Makerbot, and there’s a few others coming to light now — that’s getting pretty commoditized, I think.
In the future you’re going to see that razor/blade model: low margins on the printers, they make all their money on the back end, on the printing materials and the spools.
Then another thing that I like to look at here is the ecosystems. Your average Joe, he buys a Makerbot or a 3D Systems printer at home, he’s not going to be able to just get on his (unclear) or a CAD software and type up a design. That’s a little too complex, and that’s not going to get adoption.
You’ve got to have this easy-to-use software and a big community of things for people to print. That’s something investors should really watch.
With the two companies that are really making big moves right now, Makerbot and 3D Systems, you can get on their website. Go to Cubify.com or Makerbot.com. Makerbot has this Thingiverse; you can get on there and look at the designs and be like, “As a consumer, would I be more likely to use this service, or this one?”