For the past year and a half 3D printing stocks have been on a rampage. The big names in the industry like 3D Systems (DDD) and Stratasys (SSY) have seen their share prices both appreciate over 375% since early, to mid 2012. Wall Street had been all over these stocks, and despite the gains, many analysts still recommended them as “buys.”.
The future may still look rather bright for the big boys within the industry, but Wall Street has certainly cooled off their outlet of the stocks. Today, 3D Systems made an announcement which sent shock waves through the industry. Nearly every stock related to 3D printing is down today, and the entire tech sector seems to be hurting because of it.
Before the market opened this morning, 3D systems put out a press release warning that their guidance for the full year, 2013, non-GAAP earnings would be off. They had previously guided towards earnings of $0.93 to $1.03 per share, but have revised these numbers to $0.83 to $0.87 per share. The actual numbers will be reported at the end of this month, on February 28th, for both the entire 2013 annual figures and the 4th quarter 2013 earnings.
Management noted several reasons for the lower than expected earnings estimates. In a statement put out this morning, they gave the following reasoning,
“Consistent with our previous comments, during the fourth quarter we made very significant R&D, manufacturing and marketing investments designed to accelerate revenue growth that resulted in substantially compressed earnings for the fourth quarter,” said Avi Reichental, President and Chief Executive Officer, 3DS. “As we previously stated, we are willing to tolerate earnings reduction and even slight gross profit margin compression during this period to substantially accelerate our growth rate and market share. We firmly believe that these accelerated investments that already resulted in the announcement of 24 new products over the past nine weeks position the company to double its revenue over the next couple of years on organic growth of at least 30% going forward and to achieve greater earnings power and profitability over the long term.”
3D Systems’ stock traded down over 25% this morning, at $54.63 per share. It has since rebounded a bit to $63.70 per share, still down close to 16% on the day. The other big player within the industry, Stratasys is trading down 6% on the day at $110.90 per share, up from the lows of the day of $102.21.
Analysts do not all feel that the warning was particularly a bad omen, as the company is putting a larger portion of it’s revenue into research and development. It will be interesting to see what level the major 3D printing stocks manage to stabilize at in the coming days ahead.
Are you an investor of these stocks? Discuss them at: http://3dprintboard.com/showthread.php?1658-3D-Printing-Stocks-Collapse-After-Warning-From-3D-Systems
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