Slowing Down? Not for 3D Systems
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3D printing has been identified as one of the 12 economically disruptive technologies by James Manyika at the global research firm McKinsey. It is estimated that 3D printing could generate positive economic impact of $230 - $550 billion per year by 2025, based on reduced cost and the value of customization, where consumer uses and direct manufacturing will be impacted the most.
One of the leading 3D printing companies, 3D Systems (NYSE: DDD) continues to expand into all levels of use, including personal, professional and production. 3D Systems was recently ranked No. 4 on Forbes’ “Fastest Growing Tech Companies” for 2013. For the past three years, 3D Systems achieved 46% sales growth and 30% EPS growth annually and continues to sustain its fast growth by internal organic growth and via acquisitions. Furthermore, 3D Systems continues to ride multiple uptrends, including strong demand for compressing product life cycle and reducing new product time to market, as well as increased parts and product complexity.
3D Systems’ edge
3D Systems has an unmatched, diversified portfolio and has the first-mover advantage in several key verticals, including patient-specific medical devices and advanced manufacturing. 3D Systems is well positioned in the 3D design-to-manufacture market with its five effective growth pillars, including reinventing engineer’s desktops, accelerating 3D printer adoption, expanding Quickparts service, growing healthcare solutions and building consumer presence.
What is 3D Systems doing?
By focusing on expanding its Quickparts services, 3D Systems is becoming a leading choice for quick-turn on-demand manufacturing services, allowing 3D Systems to gain direct access to end users. Furthermore, through the process of inventing the engineering desktop, 3D Systems sees the opportunity to become a connectivities platform to capture input devices and manufacturing systems.
3D Systems also continues to roll out new 3D printers that are twice as fast compared to the models being replaced. The company is also expanding and scaling Cubify.com, providing an exclusive ecosystem for 3D printing, including apps for gamified content creation. Being the only provider of comprehensive design to manufacturing solutions, 3D Systems believes that near-term growth opportunity lies with advanced manufacturing pushing further into the manufacturing floor. However, the company sees strong upside potential on the consumer end.
3D printing is getting popular
This 3D printing ecosystem has attracted large retailers, like Staples, to join 3D Systems’ consumer initiatives. Following Staples, Amazon (NASDAQ: AMZN) has also launched a complete 3D printing store. Amazon’s new 3D printing section provides one-stop shop for used and new printers, as well as filaments for the machines, books, software, and many other parts and supplies. With Amazon’s participation, 3D printing is going mainstream rapidly. However, being the first major e-commerce site to start selling 3D printers, Amazon is doing it quietly as safety concerns linger.
One significant development on the corporate end comes from General Electric (NYSE: GE). General Electric plans to spend over $3 billion over the next several years to advance its own integration and harnessing of advanced manufacturing, as mentioned by 3D Systems’ CEO in the Annual Analyst and Investor presentation.
Earlier in June, General Electric announced the launch of two global additive manufacturing quests that invite entrepreneurs, companies and institutions to offer their solutions to both challenges: a 3D Printing Design Quest for technologies used in healthcare and a 3D Printing Production Quest for an aircraft engine bracket. While General Electric is committed to becoming the leader for the next manufacturing revolution, General Electric continues to invest aggressively into 3D printing, applying it to various segments operated by General Electric.
Being one of the leaders in the 3D printing industry with first mover advantage, 3D Systems continues to ride multiple uptrends with a clearly defined growth strategy. While large global manufacturers, such as General Electric, are investing aggressively in 3D printing, the mainstream adoption will be quickly boosted by the participation of Staples and Amazon. There is no turning back for the development of 3D printing, and 3D Systems remains a solid bet to ride the fast growing trend.
3D Systems 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 the stock today. To start reading, simply click here now for instant access.
Nick Chiu has no position in any stocks mentioned. The Motley Fool recommends 3D Systems and Amazon.com. The Motley Fool owns shares of 3D Systems, Amazon.com, and General Electric Company and has the following options: Short Jan 2014 $36 Calls on 3D Systems and Short Jan 2014 $20 Puts on 3D Systems. 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. Is this post wrong? Click here. Think you can do better? Join us and write your own!