3D Printing is cool, no matter what you think. A few years ago, this was a hype industry, and companies operating in it gained huge valuations, as evident in the example of 3D Systems Inc., the company of our focus today: (Source: Morningstar.com) If you had invested $10K before 2010, you would have cashed out $250K by the end of 2013. Well, this is wishful thinking: nobody knows when the market tops or bottoms. Regardless, the stock has tumbled by over 90% since the peak when the "pump-and-dump" action came to an end. And not only 3D Systems Inc.: (Source: Bloomberg) The stock and its peers have greatly underperformed the major indexes over the past 52 weeks. The major reason is that these companies are still quite unprofitable, and 3D Systems, in particular, has also seen a decline in the top line in Q3 2015 (even though the nine-month figures are up by ~3.5%): (Source: Q3 2015 Report) It is clear that the Asia Pacific region has been problematic for the company (down 13% on yoy basis). Americas and EMEA (for the exception of Germany) are still strong: up 8% and 15%, respectively. The bottom line is: revenue growth is struggling. And there is more to it. In 2013, Hewlett-Packard (HP) came up with the new MultiJet technology, which is expected to be introduced to the mass-market by the end of 2016. The company is new to the manufacturing of 3D printers has a very strong competitive advantage over its smaller and more experience peers: it has deep pockets. With Hewlett-Packard being in the same playground, the entire 3D printing industry is going to change in the next few years. This is unquestionable. The only question is whether 3D Systems can survive this natural selection. The company has two key advantages: (1) It is the oldest and, therefore, the most experienced in the market. It has operated in the industry for over 30 years and has developed own patents and technologies in the meantime. (2) It has a strong balance sheet with virtually no debt (the balance of long-term debt and capital leases is $8.9M vs. $1.25B in equity). The company's current assets exceed $480M and represent roughly a third of the total assets, according to Google Finance. It is clear from the above that 3D Systems has the brains and the resources to face giants. Besides, analysts predict rapid EPS growth over the next three years after the bloodbath in 2014: (Source: TD Waterhouse) A friend of mine did a DCF valuation on 3D Systems and came up with a fair value range of $10 - $12 per share (the point estimate is $10.77 per share). This range is at least 17% higher that the stock's current market price: This means that the stock offers a modest margin of error. Although I consider myself of long-term investor and focus mostly on stocks only, I thinks risk-loving investors should look into LEAPS expiring almost a year from now - in January 2017: (Source: Yahoo Finance) These securities offer good leverage. In particular, the $10 calls are worth about 21% of the current stock's price, yet provide a potentially unlimited upside opportunity. I ran the Greeks on this one, too: (Source: Option-price.com) This option may be a little bit pricey because the company is going to release quarterly earnings soon, and the market usually prices options more expensively before the results. Q4 results are rolling out about two weeks from now - on February 24, 2016. Keep this in mind. What you can also do is perform a delta hedge - buy options and short the underlying simultaneously (make sure you hedge dollar-for-dollar and remember that your delta will only be hedged at the current price level because the Greeks are dynamic). Finally, a few words from Wall St.: Wall Street firms following 3D Systems Corporation (NYSE:DDD) have announced consensus price target of $10.875 on its stock. The most aggressive expert sees the stock touching $15 in the next year while the bearish estimate stands at $6. It is the mean estimate based on the analysts polled by research firm Zacks.