Who would have thought Staples (SPLS) would become part of the 3-D printing revolution?

The officer supplier recently announced it will begin rolling out a 3-D printing service that will allow customers to take advantage of the technology. With Staples Easy 3D, customers will be able to upload design files and pick up their printed objects at a local Staples. Slated for release early next year, the launch will first begin in Belgium and the Netherlands, and then will be introduced in other countries worldwide.

This isn't like the 3-D printer your friend built in his basement. Dubbed the IRIS, it's a highly sophisticated commercial 3-D printer manufactured by Mcor Technologies. What makes the IRIS unique is that it uses standard A4 paper as the print material, which significantly lowers operating costs compared to rivals Stratasys (SSYS -0.20%) or 3D Systems (DDD -0.86%). For the time being, the competitors have breathed a sigh of relief, because paper isn't poised to become the de facto material of 3-D printing.

During the process, the paper is colored, layered, glued, and then cut into a final 3-D object. Using paper has made the IRIS capable of creating photorealistic models that take advantage of over 1 million colors. It's a match made in heaven for Staples, given its already knee-deep position in the paper business.

A paper-mache project?
Skeptics will immediately wonder if paper-printed prototypes will withstand some abuse. Mcor has attempted to answer the question with a painfully unscientific video that drops three paper printed objects on a carpeted floor. The verdict? Nothing broke, which concludes that they're "very durable!"

As much as I love the narrator's enthusiasm, I'd like to see a more vigorous test to better gauge durability. Still, I don't think the intent for paper-printed designs is durability. It's more about lower input costs and more color to see your creations in real life.

That was easy
The demand for this type of service may be quite large and untapped, considering all of the engineers, architects, doctors, educators, and other nerds seen benefiting from having access to affordable commercial 3-D printing. While this service isn't the first of its kind, it's the first major retailer to showcase 3-D printing, putting Staples in the advantageous first-mover position.

The 3-D printing industry is expected to triple in size over the next eight years and become a $5.2 billion annual business, or about 20% of Staples' annual revenue. In this context, the industry doesn't appear large enough to stage that much-needed turnaround in Staples' shares, making 3-D printing the supporting role of a bigger story.

One Staple
Shares have lost more than 50% over the last five years, justifying the need for a total overhaul of the company. The outcome of this transformation will be singular in focus, intending to make Staples the destination for everything a business needs to successful. Over and above cost savings, management plans on focusing in four strategic areas to make to this initiative a reality. It entails offering more products to its customers, continued growth in its online business, developing a more fluid experience between channels, and further expansion of product-related services.

During its third quarter conference call, it was made known that almost 75% of Staples' customers said they would consider buying additional products if it offered a broader assortment. This is where 3-D printing fits into the equation. It's an expanded service Staples can bolt on to its core offerings, creating more opportunities to up-sell other products and services. Given that North American retail foot traffic declined 2% last quarter, and European traffic declined 4%, 3-D printing has become a means to drive more people into its stores.

Portfolio worthy?
Staples shares are trading at roughly eight times forward earnings, yet the company is only expected to grow earnings by less than 3% next year . Looking out the next five years, Staples is expected to grow earnings by 5.33%. At current levels, shares are overvalued relative to its expected growth rates, but valuation alone never tells the complete story a company.

Behind these seemingly overvalued shares lies the world's second-largest Internet retailer, with over $11 billion in annual sales, a retail footprint of nearly 1,900 stores in the U.S., and a presence in 26 countries worldwide. By 2015 , management will have cut expenses by $250 million a year, which can be reinvested into its new vision of the company.

Based on my experience, the analyst community tends to discount companies going through large-scale overhauls. This in itself creates a potential investment opportunity for the long-term investor. If you believe Staples has the ability to leverage its earnings power and exceed expectations, you'll enjoy an above-average 3.9% dividend while you wait.

For Staples to become investment-worthy in my eyes, it has to prove itself by growing its earnings greater than an average of 8% a year. That's about 3% more than what analysts believe is possible over the next five years. Unless that time comes, shares remain a few staples short of amazing.