For context, shares of main rival Stratasys declined just 5.8% in May and are up 22.4% so far this year. The S&P 500, including dividends, fell 6.4% last month and is down 10.4% in 2019.
We can attribute 3D Systems stock's poor performance last month largely to the company's May 7 release of first-quarter 2019 results, which were worse than Wall Street and many investors were expecting. Shares plunged 18.8% on the day following the release.
In Q1, 3D Systems' revenue fell 8.4% year over year to $152 million and, adjusted for one-time items, its loss per share widened to $0.09 from $0.03 in the year-ago period. Moreover, the company used $15.2 million of cash from operations during the quarter.
Wall Street analysts had been looking for an adjusted loss of $0.01 per share on revenue of $164.7 million. So, 3D Systems fell short on both the top and bottom lines.
3D Systems stock's poor showing in May was also likely due in part to tough overall market conditions, primarily the result of increasing global trade tensions.
I believe most investors should take a pass on 3D Systems stock for now -- at least until the company demonstrates that its turnaround has a solid shot at being successful. Bottom-fishing is a risky strategy -- unless you're trying to catch flounder.
A successful turnaround will depend on 3D Systems being able to profitably grow revenue and generate cash from operations.