We're now two years into what can only be called a nightmare period for investors in the 3D printing industry. After flirting with a $10 billion market cap, 3D Systems (NYSE:DDD) is now a $700 million small cap. Stratasys (NASDAQ:SSYS) suffered similarly, as both industry leaders have lost around 90% in share value.

It's as if a child pointed out that the 3D emperor has no clothes and is unable to print his own. But is the selling overdone?

It was with this question that I rolled into this year's Consumer Electronics Show in Las Vegas, eager for my yearly meet-up with the knowledgeable folks at TCT Magazine who have been covering 3D printing for nearly a quarter century. Group Editor Daniel O'Connor says the industry is actually in a good place. He acknowledges that some segments of 3D printing are in the "Trough of Disillusionment" phase of the Gartner Hype Cycle but thinks some of the beaten-down companies are due for a rebound. See the full story below (a transcript follows the video).

Rex Moore: Stock prices may have continued their slide over the past year, but the 3D printing industry advanced even further -- with big players like Canon, Ricoh, and Toshiba announcing their entrance into the market. And one of the most important technological advancements is speed, as consumer printers especially are much faster than their predecessors. 

What's more, even though 3D Systems and Stratasys have struggled, not all companies have disappointed with their financial results.

Daniel O'Connor: Actually companies like Lulzbot and the smaller companies, the start-ups, have been posting some really impressive financial results. I think the consumer side's staying on track ... but what I think personally is we're starting to see people really use the 3D printers, understand what they'd use them for. We're not just printing knick-knacks and things like that now, we're printing parts, spare parts, for things around the home. To be honest that's where I see a huge chunk of consumer 3D printing, in the DIY space.

Moore: So, does a so-called trough of disillusionment indicate that a rebound is coming any time soon?

O'Connor: I mean the hype was so big about 3D printing that it couldn't fail to disappoint some people -- we'll have a 3D printer in every home dream and all of that stuff, but what we're seeing now is people using the printers properly, and I think using them for good means. One of my favorite examples is if you take a look at the e-NABLE community and how that's grown. Which is prosthetic hands for children, people printing them on the fly. That community's really grown. I was lucky enough to go to a maker event and see a child who is benefiting from that massively. He couldn't afford to get a prosthetic and he'd outgrow it, so they printed him one, and he's loving life now. Catching balls!

Moore: As far as the public companies in the sector, O'Connor says it might be a good time for investors to consider getting back in.

O'Connor: A lot of the biggest company's shares have dropped massively, but I think they'll go back up. They might not reach the peaks of $90 like 3D Systems did two years ago, but they're so low now. And people are using the technology, and they are making sales. Stratasys has made huge strides in the past year. They've improved MakerBot and all of its technology, so I think that we're at a point now where it would make sense to invest.

Moore: With the latest on 3D printing at CES in Las Vegas, I'm Motley Fool analyst Rex Moore.

Rex Moore has no position in any stocks mentioned. The Motley Fool recommends 3D Systems and Stratasys. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.