Welcome to the 3D printing revolution

Andrés is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

3D printing, or additive manufacturing, is the process of converting a digital design into a three dimensional physical object. Textile products, auto parts, jewelry and even human implants are currently manufactured via this technology. Many engineers, product developers and researchers in different sciences are actively using 3D printing technologies nowadays.

We are not talking about a futuristic idea with low probabilities of success; the technology has been around for more than three decades and it´s finally becoming more economically accessible, some 3D printing machines are selling for around $1,300 USD and the price has been going down year after year. The possibilities for this kind of technology are limitless, and it will disrupt many businesses and manufacturing processes in the future. We are probably in the early stages of a technology that can truly change the world.

With 3D printing you don´t need a big production scale to make a product viable in commercial terms, and the possibilities for customization are infinite. Companies like Nike (NYSE: NKE) have shown that customers value differentiated products and the possibility to have a pair of shoes customized in terms of design, colors and materials. People value uniqueness and personalization, that´s why NikeiD, which allows for customization of Nike shoes via a simple web interface, has been a success in terms of both sales and brand building for the company.

Customization possibilities via 3D printing could reach a whole new level, and there are many other advantages like a more efficient production process that dramatically reduces waste of material, higher precision and the possibility of avoiding transportation costs. Instead of sending a product by plane or boat, a file can be sent via web to a 3D printer for the product to be manufactured directly at the destination place.

Companies like 3D Systems (NYSE: DDD) and Stratasys (NASDAQ: SSYS) are really well positioned to benefit from the 3D printing revolution, and they deserve some serious consideration from investors looking for the best long term growth stories.  They are both involved in building and commercialization of 3D printers and related business, so they are direct competitors to some degree, although Stratasys is more focused on high quality expensive machines and 3D Systems is going for the low cost more accessible products.

3D Systems is a bit bigger, with a market cap of 1.18 billion USD versus less than 780 million USD in market cap for Stratasys. Both companies are profitable and have reported some really exciting growth over the last years, but valuation ratios are not cheap at all: 3D Systems trades at a P/E ratio of 33, while Stratasys is above 38 in terms of P/E valuation.

These two 3D printing companies are going to need some extraordinary growth rates to justify their valuation, but they certainly have the potential to deliver fabulous results over the long term. As long as this technology keeps getting more efficient and economical, its advantages are quite remarkable in many industries. 3D printing is a powerful and exciting technology which clearly has a strong potential for disruption.

Motley Fool newsletter services recommend 3D Systems, Nike and Stratasys. The Motley Fool owns shares of 3D Systems. acardenal has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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