3D Systems Corporation (DDD), Stratasys, Ltd. (SSYS): ExOne Co (XONE) Gets a Mulligan

One printer.  In a 90 day period.  In Europe.  There are dozens of reasons why this machine would not have been sold.  Sounds like a good reason for a mulligan given ExOne’s bright prospects.

Defining the competition

ExOne’s recent conference call and investor relations push have helped investors understand more about the company and industry.  According to CEO Kent Rockwell, ExOne will not only focus on printer sales to large manufacturers, but will also manufacture complex prototypes for smaller customers.  Rockwell’s target of 50% of sales from direct product printing is a way for ExOne to establish recurring revenue.

Rockwell has taken the opportunity to formally identify ExOne Co (NASDAQ:XONE)’s direct competition, and investors may be surprised to find that Stratasys and 3D Systems are not on the list.  In fact, Rockwell says that ExOne’s “primary competition is the traditional subtractive” manufacturers that have existed for years.

So it seems that all three public 3D companies can coexist, as they do not directly compete with one another.  Unlike a competitive dot-com type race to the top, in which only one company (Amazon.com, Inc. (NASDAQ:AMZN)) survives, investors should own one or all stocks as speculative plays on the technology.  This understanding of the competition is a relief to investors, and gives investors more reason to pile into shares of all three companies.

Conclusion

Seeing is believing.  Investors have seen ExOne management at work, and they believe that the quarterly miss is a minor detail when looking at the big picture.  The additive manufacturing industry has enormous potential.  There are few public participants in the marketplace, and there look to be no more joining the party soon.  And the three public companies don’t even compete directly with one another.  All good reasons to give ExOne Co (NASDAQ:XONE) a mulligan and invest in 3D technology.

The article ExOne Gets a Mulligan originally appeared on Fool.com and is written by Spencer Houlihan.

Spencer Houlihan has a long position in ExOne. The Motley Fool recommends 3D Systems, Stratasys, and The ExOne Company. The Motley Fool owns shares of 3D Systems and Stratasys and has the following options: Short Jan 2014 $36 Calls on 3D Systems and Short Jan 2014 $20 Puts on 3D Systems. Spencer is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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