Of course, last week the company put up great first-quarter results, followed up by raising guidance and acquiring Rapid Product Development Group, and then announced that Staples (NASDAQ: SPLS ) will be the first retailer to offer its consumer-oriented Cube 3-D printers both online and in brick-and-mortar locations.
As a result, now's undoubtedly a great time for the company to raise capital, with the stock trading around 95 times trailing earnings and up more than 30% over the past month alone. Naturally, though, investors are frowning on the news of impending shareholder dilution.
What are they up to?
So how does 3D Systems plan to use the money? Future acquisitions, of course! In addition, some of the funds will also go toward working capital and the ever-vague "general corporate purposes."
That'll definitely give the company some breathing room, considering it ended last quarter with $110.5 million in cash, and we're still not exactly sure how much the company paid for RPDG.
One can't help wondering, then, who exactly sits in 3D Systems' well-funded crosshairs now. For one, up-and-coming competitor ExOne (NASDAQ: XONE ) did recently post some solid numbers that sent its shares skyrocketing, but the newly public company is probably just out of reach, given its $550 million market capitalization. On that note, I still maintain that it wouldn't be a bad idea for 3D Systems to swallow the relatively tiny, privately owned MakerBot whole, especially considering that MakerBot's Replicator 3-D printers currently represent one of the most significant competitors to 3D Systems' Cube and CubeX lines.
Foolish final thoughts
Of course, there are also dozens of other smaller privately owned companies in the additive manufacturing space, so, like RPDG, 3D Systems' next acquiree may very well be another name few people know.
Despite the dilution, however, 3D Systems' growth-by-acquisition tactics have served shareholders well so far, and there's little reason believe the company will squander this latest round of funding. As a result, I won't be selling my recently opened stake in 3D Systems anytime in the near future.
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.