After taking a cue from singer Prince and partying like it was 1999 earlier this decade, 3D Systems (NYSE:DDD) has been struggling since 2014. Shares of the diversified 3D printing company are down a whopping 83% over the last five years and are in the red 17% so far this year.

The future, however, remains very bright for 3D printing in general, which continues to make steady technological advances. As printing speeds increase and material availability expands, there are increasingly greater use cases for the technology. Indeed, leading industry analyst Wohlers Associates projects that worldwide 3D printing sales and services revenue will grow from $7.3 billion in 2017 to $35.6 billion by 2024.

Given the positive sector outlook and the fact that 3D Systems arguably has some valuable intellectual property, many investors are likely wondering: Is 3D Systems stock a buy?

Close-up of a 3D printer printing the characters 3D in white plastic on a blue printing surface.

Image source: Getty Images.

Why I would not currently buy 3D Systems stock

I just don't have a solid degree of confidence that the company's turnaround will be successful, at least any time relatively soon.

I only speak for myself, though, as 3D Systems stock is a buy recommendation in at least one of The Motley Fool's subscription services. Motley Fool contributors -- writers like myself -- are encouraged to have our own opinions -- and they don't always jibe with those of the stock analysts who choose stocks for our subscription services.

Here are several of my main concerns about 3D Systems:

  • It's been struggling to grow revenue.
  • It's not profitable -- not even on a non-GAAP (generally accepted accounting principles), or adjusted, basis.
  • Moreover, key profitability metrics -- gross margin and earnings per share (EPS) -- have generally been moving in the wrong direction.

Second-quarter results

Let's put some numbers next to these concerns by looking at the company's most recently reported quarterly results, which it released in early August. In Q2, 3D Systems' revenue dropped 10.9% year over year to $157.3 million. This surely disappointed most investors, as Wall Street was modeling for revenue of $160.7 million. For some context, the company's archrival Stratasys (NASDAQ:SSYS) -- which has a very similar business and is roughly the same size -- posted a second-quarter revenue decline of just 4.1% year over year.

Moving to profitability metrics: In Q2, 3D Systems' GAAP loss ballooned to $23.9 million, or $0.21 per share, from $8.9 million, or $0.08 per share, in the second quarter of last year. On an adjusted basis, it turned in a net loss of $0.6 million, or $0.00 per share, down from net income of $6.2 million, or $0.06 per share, in the year-ago period.

Stratasys, meanwhile, posted profits on both a GAAP and an adjusted basis. Moreover, 3D Systems' gross margins declined year over year. Its GAAP gross margin was 46.6%, down from 48.8%, and its adjusted gross margin came in at 47.4%, down from 48.9%.

Better ways to invest in 3D printing

Investors who are determined to invest in 3D printing now might want to further explore these other stocks:

  • Stratasys: Like 3D Systems, Stratasys is a pure play on 3D printing. It sells 3D printers, materials, and software and provides 3D printing services. Its results have generally been notably better than its rival's. That's not to say they've been good, however, as this company is also in turnaround mode.
  • Proto Labs (NYSE:PRLB): Proto Labs is a quick-turn manufacturing service provider. It uses both traditional manufacturing techniques and 3D printing to produce custom plastic and metal prototypes and short-production-run parts. Its quarterly results have generally been good in recent years.
  • Companies that use 3D printing in their operations: Two top companies in this category are Align Technology (NASDAQ:ALGN) and Adidas (OTC:ADDYY). Align's business was built on 3D printing, as it uses the technology to produce customized clear plastic dental aligners. Thanks to a partnership with venture-funded 3D printing company Carbon, Adidas has increased its use of 3D printing to make athletic shoes and envisions a future in which it will use the tech to produce customized shoes for the mass market.

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.