Think of 3D Systems (NYSE: DDD) as the Amazon.com of 3-D printing -- on a quest to define itself as the "Everything 3-D Printing Store". With a bold strategy and diverse portfolio, this jack-of-all-trades approach lets 3D Systems adapt and grow with the rapidly evolving 3-D printing landscape more easily than its narrowly focused competitors.
3D Systems has the biggest market opportunity in 3-D printing, making it a great investment to share in the rise of this innovative industry -- and offering great potential to beat the market over the next three years.
1. Aggressively pursuing its opportunity
3D Systems is similar to Amazon in the sense that it's more concerned with investing in the long-term success of its business than with short-term earnings. As Amazon's long-term performance suggests, solid execution on this strategy can produce astounding returns for investors. 3D Systems is making those key investments in growth, focused on research and development, acquisitions, and strategic partnerships.
- Research and development: 3D Systems plans to increase its R&D expenditures by 75% to 100% in the coming years to accelerate its pace of innovation. In 2013, R&D spending increased 87%, to $43.5 million, and represented 8.5% of total revenue, up from 6.6% in 2012. Investors can expect R&D spending to keep rising in order to speed up product development time and to handle a larger number of products in development.
- Acquisitions: 3D Systems has made nearly 50 acquisitions in the past three years to build out, solidify, and extend its market opportunity. Notable acquisitions include metal 3-D printer Phenix Systems, 3-D modeling specialist Geomagic, and The Sugar Lab, which became the basis for its upcoming ChefJet series of 3-D food printers that can print sugar sculptures in full color.
- Strategic partnerships: 3D Systems has formed strategic partnerships and alliances aimed at accelerating the pace of innovation and in some cases, potentially revolutionizing the 3-D printing industry at large. Here are a few examples:
By investing in innovation and making the most of its past acquisitions, 3D Systems has kept its organic growth rate -- sales growth that doesn't count acquisitions within the past year -- on the rise. Digging deeper, we see impressive revenue growth in 2013 across the company:
2. The most diverse portfolio
Whether you're an industrial, professional, or retail customer, 3D Systems offers compelling products and services for individuals and businesses to get involved with 3-D printing. Its portfolio is built on seven core 3-D printing technologies -- the most of any 3-D printing company.
Use the list below to get an overview and to learn more about each of 3D Systems' printing technologies:
|3-D Printing Technology||Great for...|
|Stereolithography||Detailed prototypes meant to verify designs before being manufactured|
|Selective laser sintering||Functional prototypes and finished parts that often have snap fits, hinges, and mechanical joints|
|Direct metal sintering||Fully dense, chemically pure, and extremely accurate metal parts|
|Multi-jet printing||Detailed hard plastic parts with complicated designs|
|Color-jet printing||Full-color 3-D printed prototypes and models|
|Film transfer imaging||Fast, affordable, high resolution prototypes|
|Plastic jet printing||Quick and affordable basic plastic prototypes|
3. The biggest opportunity
Thanks to its broad technology portfolio, 3D Systems has the biggest market opportunity in 3-D printing -- a market expected to be worth $10.8 billion by 2021.
In 2012, the entire 3-D printing industry was worth $2.2 billion, and 3D Systems' $354 million in revenue claimed about 16% of that market. By 2015, the industry is expected to roughly double in size to $4 billion -- and 3D Systems aims to top $1 billion in sales, taking a 25% market share. Investors should expect 3D Systems' core technologies and aggressive strategy to continue driving market share growth for many years ahead.
Of all the opportunities that 3D Systems is pursuing, two of the most exciting include catering to aviation giants General Electric and Rolls Royce, which are working to print jet engine components; and health-care products combining 3-D scanning and 3-D printing to create individualized dental implants, prosthetic limbs, and even "exoskeletons" to help paraplegics walk. Both of these applications are in their infancies and could revolutionize how these industries approach product design and manufacturing -- opening the potential for a large opportunity 3D Systems can grow into.
The Foolish bottom line
The more applications 3D Systems can cater to, the more opportunities it has to generate revenue. The company is thriving by doing it all, with a wide expanse of applications in the works or on the horizon. As investors, we have the opportunity to succeed along with 3D Systems in the future of this exciting industry.
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