What Investors Want From 3D Systems
Next Tuesday, 3D Systems will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed kneejerk reaction to news that turns out to be exactly the wrong move.
Three-dimensional printing has captured the attention of the industrial and creative world, with its vast potential for innovation. As a major player in that space, 3D Systems has produced strong growth, but recently, investors have wondered if the company has gotten ahead of itself. Let's take an early look at what's been happening with 3D Systems over the past quarter, and what we're likely to see in its quarterly report.
Stats on 3D Systems
Analyst EPS Estimate
Change From Year-Ago EPS
Change From Year-Ago Revenue
Earnings Beats in Past 4 Quarters
Source: Yahoo! Finance.
Will 3D Systems start moving in the right direction again?
Analysts haven't budged recently on their near-term views for 3D Systems and its earnings, keeping both first-quarter and full-year 2013 projections unchanged. But they've cut their 2014 projections on the company's earnings by $0.10 per share, and the stock has lost a quarter of its value since late January.
3D Systems and its peers have huge potential to disrupt entire industries. With its ability to produce a wide variety of products, 3-D printing could replace traditional manufacturing and distribution methods, potentially rendering well-established commercial infrastructure obsolete.
But two main threats to 3D Systems' stock have become quite evident this quarter. First, competitors are starting to enter the space, with newly public ExOne joining established rival Stratasys in seeking to cash in on the 3-D printing opportunity. Both of those competitors are seeking their own niches, with Stratasys catering to high-end industrial and commercial applications, and ExOne focusing on large-sized applications in a variety of different materials. Even iRobot has gotten into the mix with its recent patent application for its Robotic Fabricator.
Second, valuations have gotten so high that even optimistic investors started to second-guess whether the company could live up to the hype. Poor guidance that 3D Systems issued in February's quarterly report showed the company's slowing pace of sales gains, and already, the slowdown in organic growth has emphasized just how much 3D Systems has relied on acquisitions to boost its top line.
When 3D Systems reports, be sure to watch closely the company's latest projections for its growth trajectory going forward. Even though shares have dropped substantially, any hint of a further slowdown could lead to another decline for the stock. Long-term investors may actually prefer that outcome, as it could produce a buying opportunity for those who believe 3D Systems has the inside track to capturing the bulk of the 3-D printing market in the long run.
3D Systems is at the leading edge of a disruptive technological revolution, with the broadest portfolio of 3-D printers in the industry. To help investors decide whether the future of additive manufacturing is bright enough to justify the lofty price tag on the company's shares, The Motley Fool has compiled a premium research report on whether 3D Systems is a buy right now. In our report, we take a close look at 3D Systems' opportunities, risks, and critical factors for growth. You'll also find reasons to buy or sell the stock today. To start reading, simply click here now for instant access.
Click here to add 3D Systems to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.
The article What Investors Want From 3D Systems originally appeared on Fool.com.Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends 3D Systems, iRobot, and Stratasys. The Motley Fool owns shares of 3D Systems and Stratasys and has the following options: Short Jan 2014 $36 Calls on 3D Systems and Short Jan 2014 $20 Puts on 3D Systems. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.