The decline of Stratasys Ltd.'s (NASDAQ:SSYS) stock and that of competitor 3D Systems since the end of 2014 hasn't come because 3D printing is no longer a viable product. In fact, it's a better option for product developers and manufacturers today than it was a few years ago. 

But the disappointment that 3D printing wasn't a path to astronomical growth has been what has hurt the stock the most. Though 3D printing may also never be a massive growth business, there are reasons to think that steady financial improvement is finally ahead. 

Printing a yellow 3D part with a small 3D printer.

Image source: Getty Images.

3D printing is finally ready for primetime

When 3D printing stocks were booming from 2009 to 2014, I think a lot of investors missed the fact that these products weren't really new at all. 3D printing has been around for decades, but it had just reached the point where it was more visible for consumers to buy a printer for home and materials had started to become higher quality. However, increased awareness didn't mean Stratasys' real customers were in an exponential growth phase. That would take the hard work of building partnerships with manufacturers and building an on-demand parts business like Proto Labs (NYSE:PRLB)

Stratasys is now taking the steps needed to build a business that does more than sell 3D printing equipment and materials. It has an on-demand service and has developed partnerships in aerospace, automotive, dentistry, medical devices, and other fields. As it does, it will build a solid foundation for growth that experienced product companies can leverage for years to come. 

Expectations are finally in the realm of possibility

It's hard to put a valuation metric on a company that's losing money, which is what Stratasys has done over the last few years. But if we look at price to sales, we can get a better look at where the company stands on a valuation standpoint -- at least against previous expectations. 

SSYS Market Cap Chart

SSYS Market Cap data by YCharts.

You can see that expectations have come down for Stratasys, although it's hard to call a company with a negative P/E ratio a value stock. Today, its price to sales ratio falls much more in line with the median price to sales for the broader S&P 500 -- 1.4 times -- compared to its astronomical valuation back in 2014. 

If Stratasys is indeed entering a new stage of profitable growth, this could be a good value for investors long term. 

Revving up the realistic growth engine

Three years ago, expectations for 3D printing growth had become too high, but the business is now building on a realistic base. Agreements with Airbus and Ford are examples of Stratasys integrating itself in the product development process of large manufacturers. As it does that, it'll grow as products reach production and manufacturers increase equipment and resin purchases. 

Expanding on-demand offerings should also help drive recurring revenue. Customers using on-demand services don't have to own a Stratasys printer, but they can benefit from the products, buying per unit. That's high-margin revenue for Stratasys. 

Investors should be happy that industrial users are finding more applications to use 3D printers for their long-term manufacturing plans. That will be a more stable base than the consumer products that captured the market's attention a few years ago. And it's why Stratasys' future is bright. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.