3 Reasons 3D Systems Corporation (DDD) is Still a Buy After Rising 250% Last Year

In short, no. In comparison to closest peer Stratasys, which trades at a forward P/E of 42.1x and a PEG of 4.5, 3D Systems is actually priced at about a 10% discount. Neither company pays a dividend, but at 18 times cash, 3D Systems is way cheaper than Stratasys (31.4x) from this standpoint.

In terms of growth, the sell-side expects 3D Systems to generate earnings expansion near 20% a year over the next half-decade—close to what’s expected of Stratasys—but what sets the company apart is its profitability. 3D Systems’ profit margin of 11.2% is about 140 basis points higher than its closest peer, and its 50%-plus gross margin is more than twice the level of Hewlett-Packard.

What does the smart money think?

At the end of the last 13F-filing period with the SEC, some of the most notable hedge funds invested in 3D Systems included Tiger Global Management (see the massive hedge fund’s full portfolio), Louis Navellier’s Navellier & Associates, and Cliff Asness’ AQR Capital (see Cliff Asness’ newest stock picks).

Whether it’s 3D Systems’ product advantage or its fairly attractive valuation, there are plenty of reasons to still be bullish on this space, even in the face of all that “bubble” talk. Clearly an industry leader, this company is positioned very well to be the face of 3D printing’s big push into consumers’ living rooms going forward.

Disclosure: I have no positions in any of the stocks mentioned above