Stratasys, Ltd. (SSYS), 3D Systems Corporation (DDD): Dear 3D Printing, Growth Isn’t Everything

3D Systems Corporation (NYSE:DDD) is valued a bit more reasonable than Stratasys, as it trades around $45 per share and is expected to make $1.17 per share in 2014. Still, the company is not without risks. If the Chinese government makes 3D printing a national priority, U.S. companies could suddenly find themselves competing with very well financed competitors that do not need to respect U.S. patent laws. 3D Systems carries little debt with a total debt to equity ratio of 0.1 and a quick ratio of 2.4.

Conclusion

The 3D printing industry is growing, but it will not grow indefinitely. Making inroads to the world’s manufacturing industry takes time and significant R&D budgets. Investing in Stratasys and 3D Systems Corporation (NYSE:DDD) is risky, given their high valuations at more than 35 times 2014 earnings. To justify these valuations, investors need to bet that these firms will continue growing until 2020 and beyond. For risk adverse investors and value investors it is hard to make a strong case for 3D Systems or Stratasys, given their valuations. Hewlett-Packard is a different story as it is turning itself around and is a better value play.

The article Dear 3D Printing, Growth Isn’t Everything originally appeared on Fool.com and is written by Joshua Bondy.

Joshua Bondy has no position in any stocks mentioned. The Motley Fool recommends 3D Systems and Stratasys. 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. Joshua 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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