Shares of 3D Systems (NYSE:DDD) rocketed 67.2% in August, according to data from S&P Global Market Intelligence. This brings the 3D printing company's year-to-date 2018 return to 136% through Friday, Aug. 31.
For context, shares of main rival Stratasys climbed 28.5% in August and are up 25% so far in 2018. The S&P 500 returned 3.3% last month and has returned 9.9% so far this year.
We can attribute 3D Systems stock's strong August performance to the company's release of second-quarter 2018 results on Aug. 7 that were better than what Wall Street and many investors were expecting.
For the quarter, 3D Systems' revenue increased nearly 11% year over year to $176.6 million. On a GAAP basis, the company's loss per share was flat with the year-ago period at $0.08, and, on an adjusted basis, its earnings per share (EPS) declined 25% to $0.06.
Wall Street analysts had been projecting adjusted EPS of $0.01 on revenue of $165.9 million, so the company beat the top-line consensus and crushed the bottom-line expectation.
There's no need for investors to change whatever investing course they've chosen with respect to 3D Systems.
That said, the market overreacted too positively, in my opinion, to the company's Q2 results. Revenue increased solidly, with revenue from sales of 3D printers particularly encouraging, jumping 41% year over year. But the all-important bottom-line result was unchanged on a GAAP basis and declined by 25% on an adjusted basis. Moreover, the company is not profitable on a GAAP basis.
Cautious optimism seems warranted, but unrestrained giddiness doesn't.