Talking Numbers - CNBC | Yahoo Finance

Sponsored by
Talking Numbers

Why the pain could be just starting for 3D-printing stocks

Talking Numbers

It was good news/ bad news for owners of 3D Systems stock on Wednesday.

The good news: 3D Systems guided its 2014 revenues higher to a range between $680 million and $720 million, far above the $671.3 million analysts were expecting, according to data from Thomson Reuters. The company also says professional demand for their products were up in the most recent quarter.

Sounds good, right?

Now, the bad news: The three-dimensional printing company guided its earnings down to a range between $0.73 and $0.85 per share, far below Wall Street's previous expectations of $1.27 per share. That's because they're planning on spending a lot of money on research and development.

(Watch: 3D Systems 'pretty ugly,' but I'm staying: Trader)

As well, 3D Systems cut its most recent quarter's earnings range because of weak demand in the consumer category. They now see earnings in a range between $0.83 and $0.87 per share for 2013, quite below the $0.96 averaged from 19 analysts. 

Oops.

That was enough to send shares of 3D Systems down 26% Wednesday morning, though it has rebounded a little from there. As well, other 3D printing companies – Voxeljet, Stratasys, and ExOne – all fell in by double-digit percentage points, while Onvo was also down nearly 6%. They, too, rebounded but were still down by Wednesday afternoon.

Since its highs at the start of the year, shares in 3D Systems are down 32% and were trading below $64 per share two hours before Wednesday's close. For one portfolio manager, that price is still high.

"It's a great company, great story," says Chad Morganlander, portfolio manager at Washington Crossing Advisors. "But, the valuation still is in bubble territory."

Even after the drop on Wednesday, 3D Systems' market cap is about $6.6 billion.

"It's trading at 49 times [price-to-earnings] multiple," says Morganlander. "As a value investor, we would look towards this company perhaps if it dropped down to below $50… But, at this point, I wouldn't marry the company, I wouldn't even date it."

(Watch: 3D printing will revolutionize manufacturing: CEO)

Jonathan Krinsky, Chief Market Technician at MKM Partners, says $50 is a key technical level for the stock.

"We're really looking at the $50 level as a key area of support," says Krinsky, who notes that it was a previous resistance level that became support in 2013. ."Any pullback down to that $50 level is a spot to be buying and we would be looking to accumulate there."

To see the full discussion the 3D Systems with Morganlander on the fundamentals and Krinsky on the technicals, watch the video above.

More from Talking Numbers:

Two charts showing why we're in for a huge move
Yardeni: Now's a good time to start buying stocks
Market has '99 problems but the VIX ain't one'

________________

Follow us on Twitter:  @CNBCNumbers
Like us on Facebook: facebook.com/CNBCNumbers

 

Rates

View Comments (3)

Recommended for You

  • Inflation is about to fall-and fall hard: Insana

    I would bet inflationistas a truckload of scarce limes that inflation pressures are temporary and inflation is about to fall, says Ron Insana.

    CNBC
  • Agents get subsidized 'Obamacare' using fake IDs

    WASHINGTON (AP) — Undercover investigators using fake identities were able to secure taxpayer-subsidized health insurance under President Barack Obama's health care law, congressional investigators said Wednesday.

    Associated Press
  • Apple Hints New Products Near With Bigger IPhones Looming

    Apple Inc. (AAPL) signaled that the long wait for new products is nearing an end. With bigger-screen handsets in development, Apple said yesterday that shoppers are delaying buying new iPhones, which will weigh on sales in the current quarter ending in September. Yet rather than dissuade buyers…

    Bloomberg
  • World Bank lauds India PM, offers billions in aid

    The World Bank on Wednesday offered India up to $18 billion in financial support over the next three years while lavishly praising new right-wing Prime Minister Narendra Modi's "ambitious vision" for the country. Modi's Hindu nationalist Bharatiya Janata Party was elected in May with the biggest…

    AFP
  • Best marijuana stocks to buy now

    Marijuana is going to be huge growth industry with lots of profits to be made, but that doesn't mean you buy a hyped up weed-related penny stock.

    MarketWatch
  • Wealth-Building Secrets of the Millionaire Next Door

    The tenets they follow can also put you on the path to financial prosperity and security. In the words of Knight Kiplinger, editor in chief of Kiplinger's Personal Finance magazine and Kiplinger.com, "discretionary spending -- the chic apartment, frequent travel and restaurant meals, consumer…

    Kiplinger
  • China's rich pimp their planes as jet market takes off

    Shanghai (AFP) - When a Chinese customer asked for the interior of his new Bombardier Challenger 850 jet to be covered with pricey black carbon fibre, the designer was shocked -- but happy to oblige.

    AFP
  • Play

    How to Build Your Own Annuity

    Instead of paying an insurance company, financial advisor Allan Roth recommends building your own "indexed annuity" that protects principal while giving market upside.

    WSJ Live
  • Economists worry rising wages may catch the Fed off guard

    By Lucia Mutikani WASHINGTON (Reuters) - Wages may be growing at a faster clip than envisaged by U.S. policymakers, with a recent raft of business surveys showing an increase in the number of companies raising compensation. One closely watched wage growth measure, a gauge produced by the National…

    Reuters
  • Despite sanctions call, UK approves arms to Russia

    LONDON (AP) — Britain is still authorizing the export of arms and military equipment to Russia despite the government's call for tough sanctions over Moscow's arming of separatist rebels in Ukraine, a group of lawmakers said in a report Wednesday.

    Associated Press
  • What a Marijuana ETF Would Look Like

    The changes taking place around marijuana for medical use and for recreational use are the biggest in almost everyone’s lifetime. There are quite literally billions of dollars up for grabs for those who ...

    24/7 Wall St.
  • CEO: Rivers to quit Clippers if Sterling stays

    LOS ANGELES (AP) — The interim CEO of the Los Angeles Clippers testified Tuesday that coach Doc Rivers told him he will quit if Donald Sterling remains the owner of the team.

    Associated Press
  • China's Xi ends Latin American tour at Cuba barracks

    Chinese President Xi Jinping ends his Latin American tour on Wednesday with a symbolic visit to the barracks from which Fidel Castro launched the first armed assault of his communist revolution in 1953. As part of his regional charm offensive, Xi extended a hand to his Cuban communist ally with the…

    AFP
  • A Boston Hedge Fund Made $950 Million On One Stock Today

    Shares of Puma Biotechnology (PBYI) were going...

    Business Insider
  • China food scandal spreads, drags in Starbucks, Burger King and McNuggets in Japan

    By Adam Jourdan SHANGHAI (Reuters) - The latest food scandal in China is spreading fast, dragging in U.S. coffee chain Starbucks, Burger King Worldwide Inc and others, as well as McDonald's products as far away as Japan. McDonald's Corp and KFC's parent Yum Brands Inc apologized to Chinese…

    Reuters
  • How Good Are Morningstar's Fund Picks?

    Over the long haul, Morningstar's gold-rated funds have topped their indexes. Below are descriptions of three of the firm's less-well-known selections.

    Kiplinger
  • Detroit retirees back pension cuts by a landslide

    DETROIT (AP) — A year after filing for bankruptcy, Detroit is building momentum to get out, especially after workers and retirees voted in favor of major pension changes just a few weeks before a judge holds a crucial trial that could end the largest public filing in U.S. history.

    Associated Press
  • Play

    Chris Davis: The Key to Long-Term Investing

    Davis has beaten the index by looking at cash flow, not daily price changes. Plus: Why more than half of all mutual fund managers don't deserve your money.

    WSJ Live
  • U.S. housing turning the corner, inflation creeping up

    By Lucia Mutikani WASHINGTON (Reuters) - U.S. home resales hit an eight month-high in June, suggesting the housing market was gradually regaining momentum and would help the economy to stay on a higher growth path this year. The third straight month of home sales gains, reported by the National…

    Reuters
  • JetBlue pilot among 6 arrested in Boston drug bust

    BOSTON (AP) — A JetBlue pilot from Florida is among six people arrested by Boston police over the weekend in an investigation of drug dealing incidents near the Boston Common.

    Associated Press