It may be revolutionary, but an article in the most recent issue of Barron's suggests that investors may see revolting returns should they put their money in 3D Systems and other 3-D printer companies.
The Barron's article says hedge fund manager Whitney Tilson of Kase Capital believes the stock is worth $15, roughly 78% below where it closed Friday. 3D Systems closed Monday down 5% to $63.90 per share.
JC O'Hara, Chief Market Technician at FBN Securities, sees trouble ahead for 3D Systems investors based on the stock's technicals, even if it doesn't fall $49 below its current price.
"Just looking at the charts, I see a potential for another 20% on the downside," says O'Hara on CNBC's Street Signs' Talking Numbers segment. "From the highs of this year, [3D Systems is] already down 35%."
O'Hara believes the stock's critical level is at $60 per share because that's where the 200-day moving average, a 50% retracement from its 2013 run up, an uptrend line from its 2013 lows, and the neckline of a long-term head and shoulders pattern all converge.
"You put all those together and if we don't hold $60, we have a lot of room on the downside and I see 20%," says O'Hara.
John Stephenson disagrees with the 3D Systems bears.
"I think you're much more likely to see $105 a share than $12," says Stephenson. "This is a company that's growing very fast. Top line and bottom line should grow at least 36%; that's midpoint of the guidance range."
Besides his estimates of long-term industry growth, Stephenson also sees the company's revenue mix as a potential strength for the stock.
"Fifty-seven percent of the revenue from this company is recurring in terms of services, materials, and parts on demand," says Stephenson. "This is high margin. This is dragging up the overall margin for the company. I like this name."
To see the full discussion on 3D Systems with O'Hara on the technicals and Stephenson on the fundamentals, watch the video above.
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