3D Systems Is On Track To Growth

| About: 3D Systems (DDD)

The 3D printing industry has been one of the fastest growing industries in the past two years, and the major players in the industry have gained substantial value. Players like Stratasys (NASDAQ:SSYS) and ExOne (NASDAQ:XONE) have been rising over the past three months. However, 3D Systems (NYSE:DDD) has not seen much price appreciation in the last 90 days. Nonetheless, the long-term growth prospects of the company are intact. Recent acquisitions show that the company has no plans to slow down its growth strategy.

Growing Portfolio and Global Penetration

3D systems is working to achieve growth in five different segments: growing its Quickparts on-demand parts services, accelerating 3D printer penetration, continuing to expand its healthcare solutions offerings, building 3D consumer and retail products and services and expanding its integrated 3D authoring solutions platform.

First of all, let's look at the quickparts segment -- 3D Systems made one acquisition in this segment during the last quarter. In May, it acquired Rapid Product Development Group, a global provider of additive and traditional quick turn manufacturing services. Once the integration is complete; it will allow 3D Systems to increase exposure in three different regions, namely, Asia, North America and Europe. In July, the company completed the acquisition of French based company, Phenix Systems. The company offers direct metal selective laser sintering, and it will be a nice addition to the quickparts segment. The most recent acquisition was announced on August 20, 2013. 3D Systems completed the acquisition of UK based CRDM, Ltd, a leading quickparts solutions and manufacturing services provider. The company caters to automotive, aerospace, defense and medical sectors.

Moving on to the 3D authoring solutions platform, 3D Systems is integrating its design-to-manufacturing software tools under Geomagic Solutions brand. The initiative will combine comprehensive reverse engineering tools with mechanical CAD. The initiative will allow the designers to better manage the design and implementation sections.

On the Printers front, the company is regularly adding to its already impressive portfolio of printers. 3D Systems launched ProJet x60 series of full color professional printers and new VisiJet PXL materials utilizing ColorJet Printing technology. The ProJet x60 series is built on the ZPrinter platform and further extends the range of addressable applications.

Print materials are a vital segment of the company and it generates a substantial portion of its revenues from printing materials. 3D Systems is regularly adding to its printing materials portfolio and recently launched several new print materials -- Accura Xtreme White-200 plastic for SLA 3D printers, VisiJet SL Impact for ProJet 6000 and ProJet 7000 crossover 3D printers and M3 Black for ProJet 3500 and ProJet 3510 professional 3D printers are some of the newly introduced materials.

Furthermore, the company is increasing its reseller network - during the last quarter, 3D Systems added Seiko-I Infotech (SIIT), Hawk Ridge Systems and SYNNEX Corporation.

All of the above mentioned steps by the company indicate that 3D systems is efficiently managing its portfolio and the company is on track to growth.

What are The Other Players Doing?

Stratasys is the leading player in the industrial solutions segment. The merger between Stratasys and MakerBot is complete, and the company is making inroads in the medical devices segment. The laboratories are adding Stratasys printers to manufacture a variety of medical devices. German dental lab, DCD has increased its 3D printing arsenal and added another Object 3D printer. The transformation is allowing the lab to decrease the cost and the timeframe to manufacture the products. Increasing demand for Stratasys products and services have allowed the company to post impressive results. In the most recent earnings announcement, the company recorded 20% growth in revenues and an improvement in gross and net margins.

ExOne, on the other hand, is a smaller player compared to 3D Systems and Stratasys. However, the company has been growing at an exceptional rate. Revenue and earnings growth has been phenomenal and the stock has gained about 60% in the past three months. The 3D printing industry is in its infancy at the moment, and the growth opportunity is immense. However, the growth opportunity cannot be exploited without spending on research and development. ExOne has announced that the company will be spending more on R&D to increase the number of materials used for printing.


3D Systems has been doing poorly over the past three months. However, I believe the long-term growth prospects are there and the stock will rise. The growth strategy of the company is solid and the execution is going according to the plan. Increase in the reseller network and quickparts segments will solidify the portfolio and support the growth in revenue and earnings.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.