It appears that Stratasys, Ltd. (NASDAQ:SSYS) is planning to reorganize its business yet again in an attempt to turn it around. Recently, the 3D printing solution provider announced that it had spun off its Bold Machines unit. The company stated that the spun-off unit will run as a separate entity headed by MakerBot founder – Bre Pettis – and continue to use Stratasys 3D printers including those under the PolyJet, Fortus and MakerBot lines.

Launched by Pettis in Sep 2014 as a unit of Stratasys, Bold Machines focuses on incubating new products made with 3D printing technology. Stratasys defines Bold Machines as “a workshop that helps customers innovate and bring their ideas to life with the help of 3D printing.”

Though the reason behind the Bold Machines spin-off is still unclear, we believe that this could be an attempt by the company to provide a platform to speed up the design and therefore, commercialization of 3D products.

According to a report by Canalys, an independent research firm, the industry is forecast to grow a whopping 56% in total sales this year, reaching $5.2 billion from $3.3 billion last year. Further, Canalys expects the industry to chart a CAGR (Compound Annual Growth Rate) of 44% from 2014 to 2019, with revenues surpassing $20.2 billion.

Contrary to this, over the past few months, Stratasys has been witnessing sluggish demand for its products as can be seen from the lower-than-expected results for first-quarter 2015. The company stated that a decline in capital spending by clients, particularly in North America due to uncertain economic conditions, and unfavorable currency exchange rates negatively impacted its overall results.

Therefore, in May, Stratasys announced business restructuring plans to improve the 3D product portfolio and expand its presence in the professional, education and consumer markets.

So separating Bold Machines could help the unit focus on creating new 3D products while Stratasys focuses on the marketing and adoption side. Currently, most of the demand for 3D printing comes from commercial sectors such as architecture, healthcare, art & craft and education.

The company has said that in less than a year, Bold Machines has helped over a dozen innovators to accelerate their design process. Since inception, the unit has worked on a variety of projects, such as Bionic limb design and film animation support.

So there is good reason to believe that under Pettis’ leadership, Bold Machines can achieve new highs in the 3D printing industry similar to MakerBot’s success before it was acquired by Stratasys in 2013.

That said, it is too early to determine the actual benefits of the spin-off.

Stratasys’ near-term prospects don’t look too great, as reflected in its recent decision to pare the 2015 revenue guidance. The company lowered the outlook to account for a sluggish demand trend and unfavorable foreign currency exchange rates.

Currently, Stratasys carries a Zacks Rank #5 (Strong Sell).

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