3D Systems Drops on Report of Three-Dimensional Printing Bubble
3D Systems Corp. (DDD) fell the most in over a year after Seeking Alpha said the stock may be overvalued and that the company faces stiffer competition.
3D Systems declined 14 percent to $59.50 at the close in in New York, for the biggest drop since Oct. 27, 2011. The stock has tripled in the past 12 months, compared with a 14 percent gain in the Standard & Poor’s 500 index.
The Rock Hill, South Carolina-based company makes machines that manufacture three-dimensional objects such as dental crowns and jewelry. 3D Systems may face increased competition from competitors such as Stratasys Ltd. (SSYS), financial-website Seeking Alpha said. It said that 3D Systems’ shares are “at least slightly overvalued.”
“There have been some articles reasserting the short thesis,” Holden Lewis, an analyst at BB&T Capital Markets, said. Lewis has a buy rating on 3D Systems and a price target of $75. “They used words like ‘bubble.’ It’s the bears baring their teeth.”
Lewis wrote in a note earlier this month that 3D Systems will probably continue to outperform this year. 3D Systems also recently unveiled a new desktop printer, and said it will buy Geomagic Inc., a maker of 3D-authoring software.
An amended initial public offering filing today by ExOne Co., a smaller competitor to 3D Systems, could have driven the shares down as well, said Troy Jensen, an analyst at Piper Jaffray Cos. Jensen rates 3D Systems overweight with a $73 price target.
“Gains of several hundred percent make great water cooler talk, but they could be a dangerous trap for investors,” Seeking Alpha said.
Stratasys’s stock fell 9.9 percent to $78.47.
The Motley Fool said on Jan. 25 that 3D-printing industry stocks may have entered a bubble.
To contact the reporter on this story: Olga Kharif in Portland at firstname.lastname@example.org
To contact the editor responsible for this story: Tom Giles at email@example.com