Analyst Calls 3D Printing 'Massive Clash Of Hype Vs. Reality'
With three key players in 3D printing off more than 70 percent since hitting a January 2014 peak, value investors might be attracted.
"But all we really know is that the stocks are less expensive than they were in the past," FBR's John R. Mims said. "That's different from being actually cheap."
The three former glamour stocks have pumped out a stream of recently discouraging news:
- Citing weak demand, 3D Systems Corporation (NYSE: DDD) last month withdrew its earnings guidance and separately announced the departure of its chief financial officer.
- Stratasys, Ltd. (NASDAQ: SSYS) in late April called its first quarter results "disappointing" and unveiled a reorganization of its MakerBot unit and a lower capital spending budget.
- The smaller ExOne Co (NASDAQ: XONE) last month postponed releasing its first quarter results, citing accounting "inefficiencies and delays" stemming from a new software system. ExOne said last week it will post results June 11.
Mims reinstated coverage of the three companies Friday with a Neutral rating on each, and said its stock price collapse resulted from "a massive clash of hype versus reality."
Although Mims said demand for 3D technology may result in radical changes in manufacturing over the next several decades, "it's hard to know, at this stage, who will be the winners and losers."
For example, Mims said the competitive advantage of 3D Systems and Stratasys is increasingly at risk.
Notably, Hewlett-Packard Company (NYSE: HPQ)'s plans to launch a 3D printer next year that may produce better parts more cheaply and at a faster rate than its competition, according to Mims.
Mims recommended "waiting until the dust settles before diving back into this group."
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