One Of The Loudest Barking Dogs On The Street

3D Systems Corporation DDD has been one of the more volatile and unpredictable stocks in the market in the past few years. The stock has made huge bull and bear runs in the past several years. But while market fundamentals have shifted in the 3D printing business, it seems like much of 3D System’s trading volatility may simply be due to momentum trading.

Wall Street Darling

In 2012 and 2013, 3D Systems was one of the darlings of Wall Street. In fact, the stock generated nearly a 1,000 percent gain from the end of 2011 to the beginning of 2014.

However, when the massive long-term revenue growth in the industry failed to materialize, 3D Systems shares came crashing down to earth. Incredibly, from the beginning of 2014 to the beginning of 2016, 3D Systems shares plummeted more than 90 percent.

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A Barking Dog, Panting

3D Systems made another dramatic shift at the beginning of 2016, however. A first-quarter earnings beat sent shares soaring, and 3D Systems has once again been one of the hottest stocks in the market in the past18 months. Since the end of 2015, the stock is now up 124.1 percent, and traders are wondering if the stock will finish out the year strong for yet another huge two-year swing.

3D System’s Q1 2017 earnings report was nothing special. The company missed on EPS by $0.05 per share, reported revenue in-line with expectations and issued guidance in the middle of the estimates range. However, shares have surged more than 7.4 percent since the company reported earnings.

One of the major factors in play at the moment may be an unwinding of a massive short position in the company. Short interest is now down 22.9 percent in the past three years but remains elevated. According to shortsqueeze.com, 3D Systems currently has a short percent of float of 23.6 percent with 14.6 days to cover. With revenue growth flipping back to positive territory in Q1, shorts may be once again taking the opportunity to exit their bets against the company.

Joel Elconin contributed to this article.