Red-hot chipmaker AMD pops on surprise Q2 profit >>> READ MORE

VJET Stock Malfunctions – Are 3D Printing Stocks Going to Crash?

Voxeljet has staged a huge run since its IPO


I don’t pretend to be an expert in the world of 3D printing stocks like 3D Systems (DDD) and Stratasys (SSYS) … but I have had a pretty good track record with the wide swings in Voxeljet (VJET).

vjet-stock-3d-printing-stocksBefore the IPO, I wrote that the deal was “perfectly timed” … and indeed, VJET stock soared over 300%. But then on Monday, I wrote another post that warned investors about the frothiness in 3D printing stocks in general — and in Voxeljet in particular.

Well, on Tuesday, shares of VJET stock plunged by 15%, and other 3D printing stocks fell too. DDD dropped around 6% and SSYS dropped 9%.

And today, Voxeljet stock is off another 6% in early trading.

But even with this correction, the valuations for 3D printing stocks remain at nosebleed levels. Consider that VJET is still trading at 82 times revenues. Note: this is revenues, not earnings. As for the forward price-to-earnings ratio for Voxeljet, it is a frothy 540.

Plus, asset bubbles have certainly been a popular point of discussion lately. And for the most part, 3D printing stocks seem to be a good candidate. It’s just not normal for a company like VJET, which is fairly small and grew revenues at about 77% in the latest quarter, to to triple in a few months . That is the kind of thing that happened during the heyday of the dotcoms … and we know how that ended.

Of course, the argument is that 3D printing stocks like VJET, DDD and SYSS are great companies, with strong technologies and customer bases. More importantly, they are pioneers of a huge market opportunity.

This is all true. But again, back in the late 1990s, these were the same arguments for companies like eBay (EBAY) and (AMZN). While they would go on to be great companies — and generate nice returns — they all suffered huge stock drops when the bubble popped.

And the same could very easily be the case for 3D printing stocks.

More on 3D Printing Stocks

Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO StrategiesAll About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

©2017 InvestorPlace Media, LLC