Do 3D Printers Have Moats? – ExOne Co (XONE), 3D Systems Corporation (DDD)

Page 1 of 2

For centuries moats played an important role in keeping attackers at bay. In the modern world, entrepreneurs and established players fight for market share in a similar way. 3D printing is a hot technology and any manufacturer with staying power will need to develop a moat in order to survive. As the technology continues to develop, each company’s patent portfolio will be crucial in determining the firm’s prospects.

SSYS Income from Cont. Ops Quarterly data by YCharts

Stratasys, Ltd. (NASDAQ:SSYS) tends to focus on the professional side of the 3D printing industry. It boasts a patent portfolio with more than 500 patents and a recent Wired article shows how a number of lower end consumer printers need to careful in order to avoid infringement of Stratasys’ patents. The company recently merged with the Israeli firm Object. Object’s experience with multi-material printers will help to maintain Stratasys as an innovator.

ExOne Co (NASDAQ:XONE)

Stratasys’ five year revenue growth rate of 8.87% and five year EPS growth rate of 6.74% are strong, but not amazing. Strong tech companies like Google have larger growth figures. Stratasys currently trades at a price to earnings growth ratio of 3.8. This is quite expensive and forces investors to count on strong growth for years and years.

3D Systems Corporation (NYSE:DDD) has had a very public life with allegations that their accounting methods miss-represent organic growth. The firm has gone on a string of acquisitions over the past couple years and this provided a large boost to revenue. These acquisitions have also grown its patent portfolio and after the purchase of Geomagic it will have over 1200 patents. 3D Systems has started to focus on the consumer market. In an effort to make 3D printing more accessible to the masses the company is trying to develop better software solutions that are easier to understand.

This company’s five year revenue growth of 13.89% is significantly strong than Stratasys’. Such numbers must be taken with a grain of salt due to 3D Systems’ large number of acquisitions. The bigger growth figures give the company a smaller price to earnings growth ratio of 1.95. This is less than Stratasys, but still expensive. A price to earnings growth ratio at or above 2 is considered high.

ExOne Co (NASDAQ:XONE) is a young company that recently IPO’d. It focuses on metal 3D printers and industrial grade solutions. Powerful lasers fuse metal particles together layer by layer to create an object. Currently, ExOne leases a number of patents from MIT and will pay them $100,000 per year for the next couple of years. ExOne’s own patent portfolio has expiration dates that range from 2013 to 2029.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!