Technology

Analyst Steps Into the Middle of the 3D Printing Vortex

The world of 3D printing stocks should have been shaping up for a great Wednesday, if you only looked at the news on Tuesday evening. Oppenheimer initiated coverage on the group positively late Tuesday, but the industry has a gorilla on its neck after leader 3D Systems Corp. (NYSE: DDD) issued guidance that was lower than expected.

24/7 Wall St. wanted to see what 3D systems had to say, and then to see what Oppenheimer’s report may have hinted at that still had relevance for the rest of 2014 and into 2015. There may be a silver lining here for those wanting a fresh look after a serious pullback.

3D Systems was started as Outperform with a $57 price target. Shares closed at $43.38 close Tuesday, but after 40 minutes of trading Wednesday, we saw the stock down 145 at $37.20, and the 4 million shares traded was already above a full day’s average volume.

Oppenheimer also started ExOne Co. (NASDAQ: XONE) as Outperform with a $35 price target, versus a $21.56 close. This one was actually up 3% at $22.20 more than 30 minutes after Wednesday’s open — not bad considering a $20.95 opening price. Stratasys Ltd. (NASDAQ: SSYS) was started as Perform at Oppenheimer.

24/7 Wall St. has included the disappointing news from 3D Systems itself, and then we finished with the Oppenheimer analyst detailed commentary on each of the 3D printing stocks covered.

3D Systems issued guidance that was obviously disappointing. The company expects third-quarter revenue of $164 million to $169 million, with a sequentially growing order book of $42 million. It further put its adjusted earnings from operations in a range of $0.16 to $0.19 per share. Thomson Reuters had estimates of $0.21 in earnings per share and $186 million in revenues.

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The admission was that strengthening sales of design, manufacturing and health care products and services were not enough to overcome the revenue shortfall from the continued manufacturing capacity constraints for its direct metals printers and delayed availability of its newest consumer products. At the end of the third quarter, the company brought online a second direct metal 3D printers’ manufacturing line and began commercial shipments of its latest consumer printers.

3D Systems also used the third-quarter shortfall to address the full year of 2014. Management is now calling for revenues of $650 million to $690 million and adjusted operating earnings of $0.70 to $0.80 per share. Thomson Reuters had earnings estimates of $0.78 per share on just over $707 million in revenues.

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