Here are our choices for the best 3D printing stocks for 2017.

The 3D printing industry may not have advanced as quickly as some observers hoped over the last decade, but it's quickly changing the way companies and consumers think about manufactured products. It's now possible for a designer to print a part over lunch or for a manufacturer to make a short run of 5 or 10 parts without going through a costly tooling upgrade. 

Materials advances in plastics and metals are also making 3D printing more attractive for everything from aircraft manufacturing to medical components. So who is leading in the space and where should investors put their money? Here are three companies investors looking to buy as the industry grows. 

Picture of 3D printer in action

Image source: Getty Images.

The two giants in 3D printing

3D Systems Corporation (NYSE:DDD) and Stratasys, Ltd. (NASDAQ:SSYS) are now the two giants of the 3D printing industry. A series of large acquisitions essentially consolidated the industry into these two companies, which both have very diverse sets of capabilities to offer customers. They make 3D plastic printers in sizes that range from those suited to an office desktop to large production equipment that can do small manufacturing runs. 

Future growth could be driven by 3D printing of metals for small production runs or parts that would be impossible to make in a traditional casting or machining method. Despite the promise the industry holds, however, financial results have been anything but inspiring. 

DDD Revenue (TTM) Chart

DDD Revenue (TTM) data by YCharts.

You can see above that growth has slowed and net losses have been rampant in the last two years. But the losses have primarily been driven by writing down acquisitions made at astronomically high prices. What investors should be judging is what they're buying today in these companies. 

Above, I included the gross profit figures for 3D Systems and Stratasys. I think this shows that even with the losses on the bottom line, gross profits have been strong. With tremendous growth opportunities ahead, if the companies can keep operating costs under control they could see bottom line improvement in the future. It's also worth noting that neither company has any debt on its balance sheet, lowering risks for operations going forward.

The rapid prototyping leader

While 3D Systems and Stratasys were fighting over the 3D printing equipment market, Protolabs Inc (NYSE:PRLB) was building a model based on rapidly producing parts for product designers and short run manufacturing. Some parts are 3D printed, some are machined, and others are injection molded. 

Technology flexibility allows Protolabs to provide the solutions customers need without being tied into a single process or material. And that flexibility has led to much better financial results than those of competitors, as you can see below. 

PRLB Revenue (TTM) Chart

PRLB Revenue (TTM) data by YCharts.

The advantage in Protolabs' business model is that it can provide different solutions using different technologies as companies develop it. That's especially useful because the volume of rapid prototype parts should continue to increase even as the technology being used changes. As more companies begin to use quick turnaround parts, Protolabs will be there -- and that makes it my favorite stock in the 3D printing space. 

Travis Hoium has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Proto Labs. The Motley Fool recommends 3D Systems and Stratasys. The Motley Fool has a disclosure policy.