Stratasys, Ltd. (SSYS), United Parcel Service, Inc. (UPS): Has This Industry Finally Gone Mainstream?

Of course, Stratasys, Ltd. (NASDAQ:SSYS) is chasing 3D Systems, the leader in the consumer segment, through its Cube and ProJet brands. Similar to the PC manufacturers, the company has successfully expanded its market share by marketing to the masses at ever lower price points, including its second generation Cube home printer, which retails for roughly $1,300. More importantly, 3D Systems has been more adept at growing its services business, accounting for roughly 32% of sales, versus 17% for Stratasys, Ltd. (NASDAQ:SSYS).

In the first six months of FY2013, 3D Systems Corporation (NYSE:DDD) has continued its strong growth, thanks to double-digit organic sales increases and a string of complementary acquisitions. For the period, the company reported increases in revenues and operating income of 38.0% and 43.2%, respectively, versus the prior-year period. 3D Systems’ sales growth benefited from strong unit volume increases for both its professional and personal printers, as well as its marketing of a widening array of materials and software tools for its machines. More importantly, the company has used its manufacturing experience to gain efficiencies in the production process, which has allowed it to generate a higher operating margin while reducing the price points for consumers.

3D printing is in the early innings of its advancement, as the development of stronger materials allows more customers to use the machines to produce end products, rather than just aiding in the design process. United Parcel Service, Inc. (NYSE:UPS) clearly sees the potential growth of the market and has added 3D printing to its retail service offerings. Despite the relatively high price valuations for 3D Systems and Stratasys, these innovative companies need to be on investors’ watchlists for future investment at lower levels.

Robert Hanley owns shares of 3D Systems. The Motley Fool recommends 3D Systems, Stratasys, Ltd. (NASDAQ:SSYS), and United Parcel Service, Inc. (NYSE:UPS). The Motley Fool owns shares of 3D Systems and Stratasys and has the following options: short January 2014 $36 calls on 3D Systems and short January 2014 $20 puts on 3D Systems. Robert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Has This Industry Finally Gone Mainstream? originally appeared on Fool.com and is written by Robert Hanley.

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