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Why 3D Systems Corporation's Shares Fell 24% Today

By Travis Hoium - Oct 31, 2018 at 11:54AM

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Where is the growth?

What happened 

Shares of 3D Systems Corporation ( DDD 3.52% ) fell as much as 23.9% in trading Wednesday after reporting third-quarter 2018 earnings. At 11:30 a.m. EDT, shares were still down 21.3% on the day. 

So what

Revenue was up 8% in the quarter to $164.5 million, and net loss fell from $37.7 million a year ago to $11.6 million, or $0.10 per share. On an adjusted basis, which pulls out one-time items, earnings were $0.02 per share, up from a $0.20 loss a year ago. 

3D printing a machine part.

Image source: Getty Images.

Earnings figures hit estimates from Wall Street, but revenue fell well short of the $170.1 million analysts had expected. In a business that's trying to become a growth stock again, missing revenue estimates can lead to the kind of drop we see today

Now what

Taking a step back, it's certainly true that 3D Systems is improving sales, volumes, and margins as it tries to turn the business around. What investors seem to be worried about today is that the improvement isn't happening even faster. That's the short-term view of the company, and it's what's driving the stock lower today. But the long-term view is that operations are getting better, and that's why I think today is a buying opportunity for investors.  

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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