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3D System: Loosing Its Grip On Market

April 06, 2014 | About:
mitu77

mitu

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The printing technology has been always changing from dot matrix printers to 3D printers. 3D printing is a technology that creates objects through sequential layering. As the costs of 3D printers have come down they are becoming more appealing financially to use for self-or the manufacturing of personal products.

The worldwide 3D printer market is supposed to grow at the rate of 25% annually. The can be useful in various sectors and is advancing fast. For investors, 3D printing is a technology share that could give better returns and for the long term 3D printing is going to make better products cheaper and faster.

Printer manufacturing companies had been recording new sale revenue figures with evolutions of new printing technology. 3D Systems (DDD) is one such company which had been recording new heights with its stocks booming, but this now seems to be history. The investors of 3D systems seem to be frowning as its stock prices have been tumbling, and it seems that they can’t really smile soon in near future. The competition is fierce in this and with many patents expiring in 2014 companies like 3D systems seems to have a rough journey ahead.

3D Systems Corporation is the solution provider for 3D content-to-print solutions including 3D printers, print materials and 3D authoring solutions for industrial to personal use. The company also manufactures scanners for medical use. The company had shown a steep rise in its share price 52 week high of 97.28 from the lows of 30.07 with a 52 week change of 88% approximately with an Annual average Growth rate of 26%. Market capital of $5.7billion having a high P/E ratio of 123, EPS of $ .45 and no history of dividend paid. The above Figures are promising but there are certain things what an investor should evaluate before investing.

  1. There are several other companies in this segment such as STRATASY DASSAULT SYSTEMS and HP as well as several other major players which will enter the market.
  2. Currently the market is dominated by U.S but some of the Korean companies are also selling 3D printers which could increase the competition by giving the product at lower price which could affect the financials of the company.
  3. According to some reports IT majors such as Google, Amazon, and Microsoft may enter 3d printing market due to unlimited-potential. This may lead to a price war and it will definitely have impact on the share price of DDD as these players have lot of cash for the war. But what i think is that there are several companies which can outperform Such as stated above but I would like to mention GROUPE GORGE as well as
  4. Though Graphene Laboratories Inc. is a privately held company but there is news that it has been acquired by Limiko Metals
  5. Makerbot's Replicator2 competed 3D Systems' Cube printers. Stratasys bought Makerbot and now have cash to build the brand.The investors should take this into account.
  6. Stratasys has shown impressive numbers – 43% revenue and 52% earnings growth per year over the last three years. But the company now trades at 58 times earnings when analysts only expect earnings to grow by 31% between 2013 and 2014.
  7. Stratasys has acquiring less frequent than 3D Systems, Only two in past year one with an Israeli company Object for new technologies as well as new industrial markets. The second with Makerbot.It shows the view that investors money is spent well

Conclusion

Dividend stocks can make you rich. It's as simple as that and they are also less likely to crash and burn. Investors of 3D systems mostly gained from price hike in the past but were famine struck for dividend. With bigger player like HP also planning to launce low cost 3D printers, 3D systems may find it hard to acquire a market share that it has been achieving in the past. Stocks prices have also declined in 2014 and seems it’s a long wait before we can witness any growth in prices for 3D systems


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