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Coverage Initiation: 3D Systems Corp.
Value Line recently initiated coverage of 3D Systems Corp. (DDD) in its flagship product, The Value Line Investment Survey. The South Carolina-based printing company was founded in 1986 by current Chief Technology Officer, Chuck Hull, the inventor and patent-holder of the landmark stereolithography (SLA) rapid prototyping system that jumpstarted the industry’s growth by reducing the time and cost of designing new products.. A holding company that operates through its American, European, and Asian subsidiaries, 3D distributes a growing suite of products across the globe.
While recent news items have painted the 3D printing industry as a launching pad for print-at-home products, the company’s varied offerings and solutions make it something much less exotic in its essence. Industrial markets served by 3D Systems include medical services, auto parts and aerospace. By making the development and production of prototypes quicker and more cost effective, 3D printing reduces the fluctuating charges related to traditional manufacturing and shipping methods. The above-mentioned aerospace and auto parts industries may be among the top benefactors of 3D Systems’ growth, as the printing solutions will help expedite the processes related to testing and fitting new protocols into existing production lines.
In addition to the invention of SLA over 25 years ago, the company also has developed several other game-changing technologies that have pushed the 3D printing industry forward. From selective laser sintering, which ensures precise cross-sections during the printing process, to multi-jet modeling, a form of rapid prototyping that creates solid molds used to create casting patterns, the company boasts a slate of technologically essential patents that have earned it a reputation as a market-leader in innovation.
The growth prospects for the 3D printing firm are bright, as a slew of recent acquisitions point to an improving business climate for the type of forward-looking products that the company manufactures. Among these, the additions of Rapidform and Geomagic, Inc. stand out. The former offers reverse engineering and inspection tools and aims to empower customers through more seamless transitions from conceptualization to production of designs. This add-on will help to integrate the 3D authoring solutions group into a variety of product lines. The Geomagic acquisition, set to be closed by the end of 2013, will pair the leading global provider of authoring solutions with 3D Systems’ already strong slate of products and global market reach. These and several similar moves point toward a strong near-term outlook for the company. Among them, the company looks to expand its personal printer solutions to expand its footprint into home offices and classrooms in the near future.
Over the past 12 months, 3D Systems saw its stock price triple on the heels of increased exposure and strategic add-ons. We are also estimating hefty top-line improvements over the next several years. Furthermore, an early year pullback has rendered the long-term price growth potential even more appealing. The strength of 3D’s balance sheet is also crucial to future success, as a handful of serious players are vying for market share in this growing industry. Large sums of money will likely be devoted to more acquisitions and increased research and development in an effort to claim a greater market share.
Subscribers interested in owning a piece of this innovative 3D printing company are advised to consult Value Line’s quarterly reports for 3D Systems, as well as any supplemental reports and relevant articles as important news items arise.
At the time this article was written, the author did not have positions in any of the companies mentioned.