In a critical analysis published in the Wall Street Journal, Rolfe Winkler wrote, ”[3D Systems'] valuation and the insider selling are potentially worrisome signs that 3D hype may be outpacing reality.”

Winkler has a number of concerns, from adoption of consumer 3D printing to distribution risks to weak materials sales.

Let’s take a deeper look at how far this 3D printing giant has come.

Since May 2011, when the company transferred from the NASDAQ to the NYSE, its stock price has grown nearly 300%. Their stock is riding near its all-time high, shown in the chart below.

Expanding Revenue and Building a Consumer Business

The company expects to generate around $500 million of revenue this year, with the majority of sales in the industrial sector. But it has also expanded aggressively into the consumer business with the Cube and CubeX 3D printers, and expects prices of desktop 3D printers to come down from $1300 to below $500 over time.

3D Systems recently presented a full business update at the Citi 2013 Global Technology Conference; you can read the full transcript at Seeking Alpha.

The company has acquired 37 companies since 2009 and continues to look at M&A as a way to fill in the gaps of their business. Here are some key acquisitions:

• Bespoke Innovations in May 2012 for 3D printed personalized prosthetics
• FreshFiber in May 2012 for 3D printed electronics accessories
• My Robot Nation in April 2012 for creative solutions to support 3D printing community Cubify for kids and adults
• Paramount Industries in April 2012  to advance aerospace and medical device 3D printing

But the company missed their chance to acquire MakerBot, the leader in desktop 3D printing. MakerBot was acquired by Stratasys, 3D Systems’ competitor, for $403 million earlier this year.

Challenges and Opportunities Ahead

3D Systems has had its share of success. In fact, it was recently ranked #5 of the Fortune Magazine’s top 100 fastest growing companies. But will that success continue and what are it’s challenges?

Can the Cube 3D printer series beat out the Stratasys-MakerBot partnership? Can 3D Systems maintain its industrial 3D printer sales growth and continue to optimize its supply-chain and reseller network? Will its entry into the consumer market distract from its larger industrial business?

Perhaps only time will tell. With $350 million on the balance sheet and a $5 billion market cap, 3D Systems seems poised to be competitive as the 3D printing industry continues to accelerate.

Among the stocks to watch this week is Stratasys Ltd. (NASDAQ:SSYS) which will report earnings on Monday.

MarketWatch‘s preview:

Stratasys is projected to report fourth-quarter earnings of 38 cents a share. David Miller, an analyst at Gabelli & Co., recently initiated coverage of Stratasys, rating it a hold even though he gave it high marks for its focus on expansion of professional 3D printing, healthcare applications, and strong operating leverage potential.

Seeking Alpha‘s preview:

With the huge sector selloff since mid-January, the market has become increasingly concerned about the stock. Negative analysis continues to surface regarding competitor 3D Systems (DDD) providing Stratasys with the opportunity to become the recognized leader in the sector. In addition, the recent IPO of ExOne (XONE) provides more competition for 3D industrial sales and investor cash.

President Obama called 3D printing revolutionary in his State of the Union address on Tuesday.

“A once-shuttered warehouse is now a state-of-the art lab where new workers are mastering the 3D printing that has the potential to revolutionize the way we make almost everything.”

On Wednesday, several 3D printing stocks jumped on this mention.

• ExOne Co. (NASDAQ:XONE) popped over 9% from Tuesday’s close
• 3D Systems Corp (NYSE:DDD) increased 4.8%
• Stratasys Ltd. (NASDAQ:SSYS) gained 2.7%
• Proto Labs Inc (NYSE:PRLB) was up over 28%

Above is a chart showing the growth of these 4 stocks over the last 6 months.

3D Systems (NYSE:DDD) announced the acquisition of Paramount Industries, a leader in product development and manufacturing solutions for aerospace and medical devices. This news comes on the heels of 3D Systems’s acquisition of My Robot Nation, and the $1.4 billion merger of Stratasys and Objet.

Abe Reichental, President and CEO of 3D Systems, made the statement, ”We are very pleased to add a proven direct manufacturing innovator of Paramount’s reputation, experience and scale to our rapidly growing, global network of on-demand parts services.”

This acquisition is the latest in a string of M&A deals by 3D Systems since the company went public in early 2011.

Paramount Industries itself is a 45-year-old company with deep expertise:

Paramount Industries is among the world’s most experienced manufacturers and providers of product development services, including product design and engineering, rapid prototyping, rapid tooling and direct manufacturing that produces custom parts direct from digital input.

Originally founded in 1966, Paramount has expanded its scope to apply advanced technology in all aspects of product development. Today, Paramount offers a comprehensive array of services. In addition to rapid prototyping and rapid tooling, Paramount sets the pace in direct manufacturing of precision parts from 3D CAD digital input, utilizing advanced Selective Laser Sintering technology. Paramount’s services also include injection molding, full-scale manufacturing from domestic and offshore facilities as well as assembly and packaging.

The video below showcases Paramount Industries’ high temperature laser sintering capabilities.

More information in the Press Release.