With a third-quarter 2012 earnings surprise of 15% and a solid outlook for 2013, shares of 3D Systems Corporation (DDD) have been on the rise recently. This 3D printer company has gained 238% year-to-date and witnessed positive estimate revisions in the last two months. The strategic acquisition of Rapidform products is set to drive further momentum for this Zacks #1 Rank (Strong Buy) stock. 3D Systems Beats Estimates in 1Q On October 25, 3D Systems reported third quarter earnings per share of 30 cents, beating the Zacks Consensus Estimate of 26 cents by 15% and the year-ago earnings of 25 cents by 20%. Net sales grew a robust 57% from the comparable prior-year quarter to $90.5 million. Revenue growth was primarily driven by 26% organic growth. The company reported growth across all its revenue categories, primarily led by printer revenue, attributable to a 123% surge in printer units sold, excluding Cube printer units. Revenue outpaced the Zacks Consensus Estimate by 4%. In addition, backlog at the end of the quarter amounted to $9.3 million owing to strong demand. Gross profit increased 69%, attributable to higher revenue and gross profit margin expansion of 350 basis points over the prior-year quarter to 51.8%, driven by printers and materials gross profit margin improvement. Fiscal 2013 Guidance Raised For fiscal 2013, management is targeting revenues between $345 million and $365 million, up from the previous expectation of $330-$360 million. Adjusted earnings are now expected in the range of $1.20-$1.30 per share, up from the previous range of $1.00-$1.25. Positive Estimate Revisions In the last 60 days, the Zacks Consensus Estimate for 2012 increased 14% to $1.16 per share while the Zacks Consensus Estimate for 2013 escalated 11% to $1.47. Of the three analysts covering the stock, two have raised their estimates for fiscal 2012 and fiscal 2013 in the last 60 days. Premium Valuation is Justified Currently, 3D Systems is trading at a P/B of 6.9x, and P/S of 9.2x, which are at premium to the peer group average of 1.8x and 1.0x, respectively. Considering the growth potential and synergies from strategic acquisitions, the premium valuation seems justified. Its ROE of 16.7% is much higher than the peer group's 6.7%. 6-Month Chart 3D Systems shares have appreciated 57% in the past 6 months compared to a mere 8% increase for the S&P 500. The chart shows that 3D Systems shares have remained volatile but consistently outperformed the S&P 500 Index since July 2012. The stock is currently trading above its 50-day and 200-day moving averages of $45.13 and $38.96, respectively. About 3D Systems Founded in 1986, South Carolina-based 3D Systems manufactures 3D printers, print materials and custom parts. The company also develops creative content development and design productivity tools. The company operates in North America, Europe and in the Asia-Pacific region. In fiscal 2011, international operations contributed 49% of total revenue. Currently, the company has a market capitalization of $3.0 billion.