3D Systems (NYSE: DDD), Stratasys (NASDAQ: SSYS) Showing Signs of Life?
Talk about a fall from grace. Shares of 3-D printing stocks have taken a proper beating since their hay days of early 2014. Industry heavyweights SSYS and DDD have each shed nearly 75% of their value. In January 2014, SSYS was trading at above $130 per share compared to $35 this week, and DDD was trading at $97 per share compared with the low $20s. Ouch.
To make matters worse, in April of this year both companies guided lower just before their earnings release which unleashed another furious round of selling. SSYS said it expected revenues between $748-$750-million compared with third quarter guidance at $750-$770-million. These lowered revenues were expected to translate to a full year net loss for the company. DDDs lowered guidance was pretty much the same story as it blamed it woes on, “currency issues and the “aftershock” of declining oil prices for the decline in customer spending.” Lower oil profits apparently don’t bode well for DDD’s industrial consumers, which make up a large share of their business. Accordingly, analysts pounced on the stocks, handing out downgrades across the board which sent share prices plummeting even lower. Simply put, these companies sold off, sold off, and then sold off some more. So why cry over spilled 3D printer ink..err filament? After the sharp sell offs, both companies have formed a nice base and are upticking slightly on their daily charts. This is not to say they will return to their glory days anytime soon, but a short term bounce may not be out of the question. Sure, the industry is marred by a number of issues, not the least of them being Hewlett-Packard’s (HPQ) entrance into the 3D market. The Motley Fool reported back in November of last year that HPQ plans to bring to market in 2016 a 3D printer that boasts speeds ten times those of the leading technologies. Yikes, that can’t be good. But as short term traders, were not really concerned about these things. What we see is a set of stocks that have taken a pummeling beyond imagination – and even when it looked like things couldn’t possibly get worse, they did. That’s where they find themselves today.IMAGE CREDIT
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It’s anybody’s guess how far they bounce from here. But if you are a contrarian looking to get positioned at a good inflection point, DDD and SSYS may be worth a closer look. As always, proper risk management is crucial.