by Dan Burrows | January 15, 2014 12:16 pm
For anyone long-term bullish on 3D printing stocks, this might be the pullback you’ve been waiting for.
3D printing stocks are getting hammered this week, as a double-dose of bad news ran headlong into soaring share prices and overheated expectations. Two prominent 3D printing companies — Stratasys (SSYS) and ExOne (XONE) — issued warnings Tuesday, and now the whole sector is in freefall, including 3D Systems (DDD) and Voxeljet (VJET).
SSYS stock was slammed after Stratasys forecast that its full-year earnings would miss Wall Street’s estimates. And XONE stock took a beating after ExOne slashed its revenue guidance.
That has made for some ugly trading sessions.
SSYS stock fell more than 8% Tuesday, while XONE dropped more than 5% and another 10% Wednesday. DDD stock and VJET were also caught in the downdraft.
True, 3D printing stocks are tough to value using things like price-to-earnings and price-to-sales metrics. After all, 3D printing stocks look like the kind of long-haul buys that could generate big returns.
But, as with every hot new technology, it could be a while before the real winners and losers emerge.
That said, there’s no question that some of the most attractive names in the 3D printing stocks sector — like SSYS, XONE, VJET and DDD stock — just got a lot cheaper after some sizzling hot runs. And make no mistake: Running up far and fast helps explain the steep selloffs following these warnings from the major 3D printing companies.
That’s what happens when fast-running and expensive momentum stocks pop a nasty surprise on the Street. Traders can’t get out fast enough, if only because they know other traders are selling too.
Heck, these 3D printing stocks are up anywhere from 50% to 150% in the past 52 weeks. That’s why when it comes to 3D printing stocks — and DDD, VJET, XONE and SSYS stock in particular — it’s shoot first and ask questions later.
Which is always good if you’re long-term bullish and looking for better entry points in these 3D printing companies.
Just look at SSYS stock. Wall Street analysts practically fell over themselves reiterating their “Buy” calls and advising clients to take advantage of the pullback. Analysts at Brean Capital, FBR Capital, Piper Jaffray and Citigroup were just some of the names defending the SSYS stock bull case.
The selloff in XONE stock also looks to be overdone, seeing as the company’s lower revenue projection was tied to the timing of sales — not demand for ExOne’s machines. The sales will still go through, XONE assured investors, but they won’t be booked until 2014. The revenue is still there.
And of course DDD stock and VJET stock are only selling off as part of the wider shellacking of 3D printing stocks.
As we’ve written before, if you’re looking to make an investment in any momentum-heavy 3D printing companies, remember that these are high-risk plays and you’re better off betting on a number of companies instead of just one of the 3D printing stocks.
This week’s action confirms how volatile 3D printing stocks can be. But if you can handle the risk, it’s also made a number of 3D printing stocks all that more attractive.
As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.
Source URL: http://investorplace.com/2014/01/3d-printing-stocks-ssys-xone-ddd-vjet/
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