3D Systems (DDD) reported earnings yesterday, the news wasn’t good and the stock dropped from $49 to $45. But really DDD lost its groove on February 5th when the company (1) missed estimates of $0.31 by $0.12 (wow) and (2) lowered (gashed?) 2014 estimates. The stock dropped from $76 to $64 that day.
After the carnage, analysts lowered their 2014 estimates from $1.29 (a quarter ago) to $0.81. 2015 estimates got slashed from $1.66 to $1.20.
Here’s what DDD looked like last quarter, this data was taken on March 31, 2014:
One Year Chart
Wow, look at the red. Negative profit growth and a P/E of 73. DDD management said it was lowering estimates to invest in new machinery. Whatever. Excuses. Stock growth follows profit growth, especially in tough markets like this.
Also note in this one-year chart that 2014 profits were expected to be lower than 2013’s. and since these estimates just got gashed. One would think that could (would) happen again in the next quarter.
Fair Value
After I compiled the data on 3/31, I felt the $59 stock was worth $28. Now at $45 it seems the stock is on its way there.
Sharek’s Take
The real problem with these 3D printing companies is lack of differentiation. Barron’s wrote about this on March 8th. These stocks remind me of router & server stocks in 2000. The difference is 3D printing companies are still growing sales, whereas the server/router companies had demand drop off a cliff. I’m also not a big believer in 3D printers for home use. Still, I’d stay away from 3D printer stocks like DDD, it’s better to short them then own them.
View the Earnings Table here.View the Ten Year Chart here. View the Profit History here.
