Seeking Alpha

3D printing stocks lower after Stratasys offers mixed 2014 guidance

  • 3D Systems (DDD -1.2% premarket), ExOne (XONE -2.5%), and Voxeljet (VJET -1.7%) are lower after Stratasys (SSYS -4.4%) offered above-consensus 2014 revenue guidance, but below-consensus EPS guidance.
  • Stratasys cites major sales/marketing and R&D investments for its EPS guidance.  Both Stratasys and 3D Systems have been ramping their R&D spend (I, II) after years of keeping it at a miniscule percentage of revenue (a policy that hadn't gone unnoticed among critics).
  • Stratasys expects its op. margin to be flat Y/Y in 2014, with margin growth in its core business to be offset by a larger contribution from MakerBot, which has a lower op. margin. Capex is expected to be in a range of $50M-$70M (compared with revenue of $660M-$680M).
  • RBC has started coverage on 3D Systems and Stratasys with Outperform ratings, and predicts the 3D printing industry will post a 24% CAGR from 2013-2021.
  • The firm likes 3D Systems' end-to-end product line, M&A activity, and margin expansion potential, and it's a fan of Stratasys' 3D-printed parts business (RedEye) and dominant additive manufacturing position, as well as MakerBot.
  • Previous: 3D Systems, Stratasys CES product launches

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Comments (13)
  • 3D Printing Investor
    , contributor
    Comments (512) | Send Message
    2014 will be a "3D Printing Stock Picker's Market"
    In comparison to the Stratasys lowered outlook, new player Cimatron (CIMT) is recently reported a record Q3, is expecting a record Q4, has Terry Wohlers on board, and is entering 3D printing software sales this year.


    Cimatron has a trailing PE of 22 using GAAP and 67% eps growth in the mrq:

    14 Jan 2014, 09:37 AM Reply Like
  • Esekla
    , contributor
    Comments (3672) | Send Message
    Although I'd predicted such volatility, it's not really appropriate for the market to be grouping these stocks together. I actually think that the decoupling of prices amongst this group may wind up being a leading positive indicator for the few stocks that will actually capitalize on the potential of additive manufacturing:

    14 Jan 2014, 09:41 AM Reply Like
  • investdeep
    , contributor
    Comments (34) | Send Message
    I see 3D stocks at Bargain prices!
    Smarts load for 2014.
    14 Jan 2014, 09:54 AM Reply Like
  • sibrazy
    , contributor
    Comments (4) | Send Message
    Check out utube for new printers. Don't sell your stock


    Si brazy
    14 Jan 2014, 10:58 AM Reply Like
  • sibrazy
    , contributor
    Comments (4) | Send Message
    Look at the utube video about all the new printers and that will tell you where 3d is headed.


    Si Brazy
    14 Jan 2014, 10:58 AM Reply Like
  • Stymie67
    , contributor
    Comments (179) | Send Message
    Buy 'em...
    14 Jan 2014, 11:29 AM Reply Like
  • Lonnie Starr
    , contributor
    Comments (317) | Send Message
    Stratasys earnings are not DDD's earnings, I expect these to decouple if DDD comes in on target or above. In any event it seems to me that only about 6 dollars of price appreciation was due to short term traders. Yesterday 1/13/13 I happened to catch a 41,000 share buy going across the ticker. There's still plenty of buyers coming in, even as the selling continues. The short interest has dropped again from 16m to 14.70m or 20% of the float. Guess they're tired of meeting margin calls, or seeing more of their posted funds getting blocked in their accounts.


    None-the-less, these daily blurbles mean little in the scheme of long term investing. They are just the things that cause the panic prone investor to sell, then look back with regret later on.
    14 Jan 2014, 02:00 PM Reply Like
  • sandshifteralerts
    , contributor
    Comments (5) | Send Message
    You realize for every buyer, there's a seller, right? That whole buyers vs. sellers argument makes zero sense.
    14 Jan 2014, 09:41 PM Reply Like
  • Lonnie Starr
    , contributor
    Comments (317) | Send Message
    The truth is there is not a buyer for every seller, unless you consider the market maker to be a buyer or seller. When you sell or buy, you sell to and buy from the market maker(s). Most people do not know, or appreciate the meaning of this fact. When a market maker looks at his board and sees more shares being sold than brought he takes the price down as fast as market rules allow him to, because that's his money he's paying out. Money, that's sort of held in trust for his market making activities. His profits come from the spread between buying and selling. So, when volume is high, prices can move extremely fast.


    It's like a seasoned trader once told me, his misconception was that; For every buy there was a sale and vice versa, such that no money was ever created or lost in the market. Nothing could be further from the truth! Consider what happens as you watch the ticker, not all the shares in the float are trading when that new quote comes across the screen, but the price of all shares change with the price of the new quote. Such that, the sale of just a few shares can remove many millions of dollars from the value of the entire float, and the shares that you hold.


    It took many millions of shares being purchased to get the price up to where it is today, and it will take nearly that many sales to bring the prices down to where they were long ago. As you can see, that's not going to happen. But, since there are millions of shares being freely traded and not in hands holding them close, the stock will fall as long as the sellers continue to out number the buyers. Because the market makers will have less and less cash to make purchases with, so they will move the prices lower until, at some point the cash they have on hand begins to pile up again. It will, as long as the future prospects of the company are brighter than the possible dark side.


    It takes time for people to learn about the new technology, and more time for them to figure out how it could benefit them. The commercial people move the fastest because, they have a financial incentive to match or beat their competition. While home users have the least incentive, since they are mostly motivated by curiosity, although a few may see some financial potential.


    The commercial user needs to, not only train their people in the use of these new machines, but they need to know the limitations. Only when they feel they can knowledgeably rely on the machines to faithfully perform the tasks they assign to them, can they really begin to use the machines on their main production lines. All of which take time. Nor will we get any reports about how industry acceptance is moving along. So, all you can do is assess for yourself, what the potential of these printers are, and make your investment decisions on those assumptions. But, whatever assumptions you make, it will take time for them to be realized.


    Seasoned investors know this, which is why they are willing to hold tight for the long run. People who jump in and out for a few quick dollars, are likely to miss the overall appreciations that come with steadily increasing acceptance, because it's a cumulative thing. One quarter builds on the last quarter, but the time is too short to make much difference, it's the year over year timeline that captures the truth about your assumptions.


    Rest easy, stay long and ride out the waves. If the technology is important, rest assured that there will be enough on the plate for all comers, most especially for the companies with the biggest plates.
    15 Jan 2014, 09:09 AM Reply Like
  • BabalouieToo
    , contributor
    Comments (14) | Send Message
    Couldn't have said it better Lonnie!
    14 Jan 2014, 06:33 PM Reply Like
  • Glenway Fripp
    , contributor
    Comments (1194) | Send Message
    I am confused. There are two basic business being invested in here. Really big machines that are bought by companies and desk top printers. I am under the impression that the big lure for investing in 3D printer stock is the promise of desk top printers. Is that about right? If this is the case, it seems to me that there are so many choices and brands competing to sell desktops that it is hard to imagine being able to command substantial profit margins. All of these devises seem to operate the same way which makes me believe that these devises have already been commoditized. Some models already have the dubious distinction of being, 'made in China' and there are inexpensive Chinese knock offs in the wings in the event that desktop 3D printing actually becomes a hot market. As of now it is not a hot market. Is there a desktop 3D printer that stands out and why?
    15 Jan 2014, 08:46 AM Reply Like
  • investdeep
    , contributor
    Comments (34) | Send Message
    3D printers are all under very rapid R&D, getting better and better in every possible way so consumers will like the printers as much as possible.
    Some printers do stand up, yet more are to come and catch their place.
    Note that 3D printers going to be everywhere factories & households, all around the world, this stage is coming, 3D Printing will be very common, and that's what long-term investors should wait for, that's where the huge revenues are.
    15 Jan 2014, 09:23 AM Reply Like
  • Lonnie Starr
    , contributor
    Comments (317) | Send Message
    While any company is free to make 3d printers, the problem is the support you will get with a bigger company. If you buy a bargain basement printer from some nameless company, you're likely to get poor performance and support along with it. Which is why many of the current competitors, entering the market while it is hot, will quickly fade from existence.


    At some point in time the novelty of owning a 3d printer will wear off, and consumers will turn to looking for quality over newness. Smaller entrants will have smaller offerings, fewer materials and scarce distribution and support. So the customer who grabs a 99 dollar printer, runs out of supplies, goes back to the store and has a hard time finding more materials, or has a problem and can't get support.


    The printer requires software that writes 3d files in a language that the printer can understand. These new entrants are trying to say that their printers can use any files, but I'm sure that is not the case, they have proprietary files for their printers and you may need scanners they don't provide. 3DS provides the software, the scanners and the materials, has good distribution and customer support, so their customers will not be left high and dry, while the new competition will not provide these advantages. Internet "badmouthing" will quickly exacerbate the problems of those who do not have a comprehensive business plan. Remember, it is very expensive to provide consumer support and materials distribution, as well as scanners and software that is easy to use and effective for the printer you buy.


    We had this problem with 2d printers with the inks and print files they would accept. Many people purchased cheap printers, only to find that they could only print certain types of files, could get no support and could not even get more ink. Nor at reasonable prices or without long lead times.


    So, I wouldn't worry about these competitors, they're basically just selling boxes, because there's a hot market for them.
    15 Jan 2014, 09:31 AM Reply Like
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