Why 3D Systems Dropped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of 3D Systems (NYSE: DDD  ) dropped today by as much as 11% after the company reported earnings, but has recovered most of those losses.

So what: Revenue for the second quarter soared 52% up to $83.6 million, with non-GAAP earnings per share of $0.27. Sales fell slightly short of analyst expectations. The growth was primarily driven by a 112% increase in printer units sold, while its backlog increased on strong demand.

Now what: The company trades at a premium valuation so investors may have been expecting more and are disappointed that sales fell slightly short. Additionally, CEO Abe Reichental said the company faces lingering "economic uncertainties," but should still benefit from R&D spending by its customers. 3D Systems is reaffirming its full-year guidance, with revenue forecast to be between $330 million and $360 million and adjusted earnings per share of $1.00-$1.25.

Interested in more info on 3D Systems? Add it to your watchlist by clicking here.

Fool contributor Evan Niu holds no position in any company mentioned. Click here to see his holdings and a short bio. Motley Fool newsletter services have recommended buying shares of 3D Systems. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (3) | Recommend This Article (5)

Comments from our Foolish Readers

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  • Report this Comment On July 26, 2012, at 10:18 PM, phrankee1221 wrote:

    Fool readers have been reading positive assessments on 3D for months now...and the company and stock price have performed far better than the overall market. I'm holding my shares and planning to add more. I also own SSYS and would like to add some to that position. That said, what's the current consensus on these 2 companies? Still a "buy," or is it time to ease off the throttle a bit? For the record, when I originally bought into both companies some months back, my game plan was to hold for a minimum of 5 years.

  • Report this Comment On July 29, 2012, at 3:09 PM, bobbyk1 wrote:

    Ive added three times on pull backs.Sold once on a surge.I wont change my core posistion but will buy and sell on big moves.After earnings report I think were in good shape until next quarter.Follow the daily price action and you will see the opportunities.Good Luck!

  • Report this Comment On July 31, 2012, at 4:56 PM, hygro wrote:

    Great innovative concept, but this is going to need more marketing muscle to reach it's potential. Especially in the "risk off" environment. It the product was driving monster revenues for the buyers and suck them into the market this would be a more viable investment. At some point either serious marketing and sales investments will be required, or they need a/some major league partner(s) are resellers. Get a Xerox or somebody with massive sales structure to drive big volume, get the costs down with and make this something that everybody can find a low-cost commercial or consumer value for. This should be in every Fedex Office center, not a unique "boutique" like product with lots of cool.

    You know, that "crossing the chasm!"

    This will likely drive investors nuts until is has a stronger go-to-market model.

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