The 3D printing industry is expected to grow at an exponential rate in the near future. Analysts and market researchers anticipate the growth of this industry to reach a mammoth market of $10.8 billion by 2021. Looking at this demand, bigger players like Hewlett Packard (HPQ, Financial) are also planning to venture into the 3D printing business.
HP has always been known as one of the leading manufacturer of printers and now it plans to include 3D printer to further strengthen its product portfolio. The company plans to launch a 3D printer by end of the current fiscal, and this may also affect various existing manufacturers’ sales as HP will leave no stone unturned to acquire a market share. At present, this market is primarily dominated by 3D Systems (DD) and Stratasys (SSYS) and it is yet to be seen how long they can be the leader with bigger players like HP stepping into the market.
What looks revealing is the policy of HP to enter the 3D printing market organically. It has no plans of any acquisitions just to rush into the 3D printing market. This policy always safeguards the investor’s interest as acquisitions do not mean guaranteed growth. HP also has a leading advantage over the existing players based on its size and resources.
Journey ahead
The company has made significant progress laid out by its five-year road map. The company has triggered by various innovations and introducing industry-leading technologies in its product portfolio.
The company seems to be setting a foot on the pedal and is focused with innovative strategies; it further joins the cloud band wagon, bug data, security and converged infrastructure.
It is all set to venture into the big market of 3D printing that will make a strong printer portfolio of HP.
HP’s focus on 3D Printer
Price and speed has always been a major constraint in the 3D printing industry. HP is focused to provide low cost printers, with significant faster speed to stay a cut above its competitors.
Speed has been a major constraint especially for industrial 3D printers. HP focuses on providing 3D industrial printers that will complete the printing job at a much faster speed. 3D printing in industries is still a raw market, as industries are a bit resistant to embrace this technology, mainly because of the printing speed.
HP is known for its extravagant expenses on research and developments and with the amount of HP's resources, we can expect HP to churn out a 3D printer which will be cost effective and faster.
Competitors
3D systems and Stratasys are currently the market leaders and ranked at the top of the charts in the domain of 3D printing business. HP will face a fierce competition from these companies when it launches its 3D printers. Both 3D systems and Stratasys are rich with its products portfolio of 3D printers with a global footprint. Lately, though, investors have lost confidence in 3D systems. The stock prices of 3D systems have declined drastically. Both of these companies are focused to acquire bigger market start with various strategic moves like joint ventures, new launch and acquisitions. 3D systems had made over 50 acquisitions in the past 3 years, and since December 2013, it has made 5. This goes on to say that the company is all focused to stay number one in the 3D printer segment.
Conclusion
HP, with its global footprint and leader as a manufacturer of printers, will certainly gain from the voluptuous market of 3D printers. The company is rich in cash reserves which also helps it to establish a wider market base with strategic marketing expenses that it will incur post launch of 3D printers.
From the investor’s perspective, HP trades with an attractive PE of 13.33 with an EPS of $2.66. The company also safeguards the interest of the investors by regularly paying dividends. I would suggest a buy for this company.
