For the year-to-date, 3D printer manufacturers Stratasys Ltd. (NASDAQ:SSYS) and 3D Systems Corporation (NYSE:DDD) are down more than 57% and 32% respectively.
Those declines are particularly painful after seeing SSYS climb more than 63% in 2013 and DDD rise more than 137%.
However, shares of SSY jumped slightly on Monday, as the 3D printer company reported first quarter earnings.
SSYS posted first-quarter revenue of $172.7 million and adjusted earnings per share of 4 cents. Wall Street was expecting SSYS to post revenue of $172.5 million and EPS of 3 cents.
The top- and bottom-line beats look great, except for when compared to first quarter results in 2014, when SSYS posted revenue of $151.1 million and earnings of 40 cents per share.
SSYS management expects full-year 2015 revenue to fall within a range from $800 million to $860 million and earnings per share of $1.20 to $1.70. Wall Street had been expecting EPS of $1.39 per share.
Just last week, rival 3D Systems reported earnings that mostly Stratasys’ earnings, but the stock fell more than 4.5% on the news.
3D reported revenue of $160.7 million, a 9% climb from the previous year, and posted adjusted earnings per share of 5 cents. 3D management also withdrew its previous revenue and earnings guidance, likely the true reason why Wall Street pounded DDD after its earnings release.
Management at both SYSS and 3D Systems sounded worried during their conference calls. Each company mentioned slowing demand and adoption as reasons for concern. And that’s something investors should really consider.
SSYS: The Good, the Bad and the Optimistic
While current 3D printing technology is exciting because it opens up new doors, allowing individual consumers to design and print their own products from home, the technology has not yet lowered the cost of producing products enough to make 3D printing a viable option for the mainstream consumer.
The same goes for the industrial side of 3D printing. Mass production of easily made small products can still be produced much faster and cheaper with old-fashion means when compared to printing them. But, when it comes to specialty commercial products, 3D printing is gaining headway.
Just last week, Stratasys reported that Airbus had produced more than 1,000 flight parts for its A350 XWB aircraft. Airbus said the decision to use 3D printing technology help the company manufacture stronger, lighter parts while reducing production time and cost as well as elevating supply chain restrictions.
Stratasys has always focused more on the commercial aspects of 3D printing, which gives it a definite edge over DDD from an investment standpoint. But, that is not to say that SSYS stock is a screaming buy today.
Bottom Line for SSYS Stock
SSYS stock still has a long road ahead of itself. 3D printing has yet to catch on with the mass consumer markets due to its lack of applicable uses and the price of the printer.
But the Airbus example is a big step in the right direction for both Stratasys stock and 3D Systems stock, both of which could take off if the industry can continue to mass produce items at a cheaper cost and better quality than current production techniques.
My advice for either stock is wait until the industry proves its product is a must-have, world-changing technology before risking any money.
As of this writing, Matt Thalman did not hold a position in any of the aforementioned securities. Follow him on Twitter at @mthalman5513.
