Why 3D Systems' Shares Soared

Updated

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of 3D Systems (NYS: DDD) were up as much as 19% in early trading, but have settled into a gain of over 14%, after the company's third-quarter earnings came in ahead of analysts' expectations. Strong results also prompted a full-year guidance boost.

So what: The high-flying 3-D printing pioneer looks to reverse a summertime stock-price slide with $90.5 million in revenue and adjusted EPS of $0.32. Both figures beat the consensus estimates of $87.3 million and $0.27 in EPS. Full-year earnings guidance was raised to $1.20 to $1.30 per share on revenue of $345 million to $365 million. The earnings boost comes in well north of the consensus projection of $1.12 in EPS for 2012. Results were generally strong across the board, continuing 3D Systems' tradition of consistent growth in all segments.


Professional and personal printers saw the strongest growth, which indicates more interest in prototyping than in the final production of goods at the moment. There's no word on how much interest there is in the company's consumer-focused low-cost Cube printer, as 3D Systems specifically excluded it from its calculation of 123% growth in printer unit sales, but did not offer specific numbers otherwise.

Now what: 3D Systems has been a high-priced stock for some time, but it continues to have excellent growth and incredible investor interest, which has helped push its valuation to multiyear highs. As with any momentum stock, any underperformance is likely to hammer it down as much as today's outperformance lifted it up. The company's fundamentals remain strong, and it has $184 million in the bank to continue its growth. There seems to be nothing blocking 3D Systems from hitting another all-time high before the end of the year, but it's going to be worth keeping a close eye on in the coming months.

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The article Why 3D Systems' Shares Soared originally appeared on Fool.com.

Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more news and insights.The Fool owns shares of and has written covered calls on 3D Systems. Motley Fool newsletter services have recommended buying shares of 3D Systems. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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