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3D Systems: Ripe For Profit-Taking

Summary

3D Systems pleased investors after reporting fourth quarter results last month.

Rally in shares looks ready to take a pause.

Stratasys's valuation more attractive.

What happens when a former high-flying momentum stock crashes? Such is the case for 3D printing stocks. Their valuations peaked a few years ago, but these companies kept making acquisitions and growing their patent portfolio. Fortunately, 3D Systems (NYSE:DDD) and Stratasys (NASDAQ:SSYS) have no debt, but they do face obstacles. 3D Systems may pique investors seeking deep value. The stock price multiple may still compress as markets price in lower growth, but it might prove itself as a survivor in a competitive field.

3D Systems rose another 25% in the last month after reporting fourth quarter revenue that were not as weak as feared. Expenses flattened, while sales grew 21% sequentially. Favorable timing of orders from industrial and healthcare customers helped 3D Systems' revenue in the quarter. The company's headline GAAP loss of $5.85 per share, or $655.5 million, is due to massive one-time charges. The company booked goodwill, unsold inventory, amortization, and intangible impairment charges. This should mean 3D Systems...


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