For context, shares of main rival Stratasys declined 14.6% in August, so it was a bad month for the leading pure-play 3D printing stocks. However, Stratasys stock is still up 30.2% so far this year. The S&P 500, including dividends, fell 1.6% in August and has returned 17.5% in 2019.
We can attribute 3D Systems stock's poor performance last month largely to the company's Aug. 7 release of its second-quarter results, which were worse on the top line than Wall Street and many investors were expecting. Shares plunged 14.1% on the day following the release.
In Q2, 3D Systems' revenue fell 10.9% year over year to $157.3 million, led by a 27% drop in 3D printer sales. Adjusted for one-time items, the South Carolina-based company's bottom line came in at breakeven, down from $0.06 in the year-ago period. Wall Street analysts had been looking for an adjusted loss of $0.04 per share on revenue of $160.7 million. So, 3D Systems beat the profit consensus estimate, but fell short on the top line.
On the positive side, the company showed a sequential improvement on the cash generation front. In the second quarter, it generated $18.7 million in cash from operations, whereas in the first quarter it gobbled up $15.2 million of cash in its operations.
3D Systems' revenue drop accelerated sequentially in the second quarter and its adjusted bottom line worsened on a year-over-year basis. Unless and until the company demonstrates some solid signs of a turnaround, most investors should wait on the sidelines.