Do 3D Printers Have Moats? – ExOne Co (XONE), 3D Systems Corporation (DDD)

ExOne’s own sales are insignificant. In 2011 it reported sales of just $15.29 million. The company has a small long term debt load of $4.13 million. The market has already given this player a market value greater than $300 million. Until ExOne grows and shows that it can deliver solutions that significant numbers of manufactures are willing to pay for, it is best to leave this stock on the watch list.

Conclusion: Growth is already Priced in

Formlab’s Form 1 desktop printer has generated a large amount of press lately. Patent infringement allegations from 3D systems abound. The reality is that established players with large R&D departments are in control. Established players use their patents to maintain their pricing power and control. In the short term this will reduce the availability of low cost solutions and limit the growth of the industry as a whole.

The top 3D printing companies have serious moats with their large patent portfolios, but they are very expensive. Stratasys price to earnings growth ratio of 3.8 and 3D Systems’ ratio of 1.95 price in a large amounts of growth. ExOne is still a small company with paltry sales. Until expectations come down or growth pans out, 3D printers are best analyzed from the sidelines.

The article Do 3D Printers Have Moats? originally appeared on Fool.com and is written by Joshua Bondy.

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