What's Ahead For 3D Systems?

On Monday morning, 3D Systems Corporation DDD will announce its third quarter earnings. Wall Street will be looking for earnings per share of $0.17 on revenue of $167.71 million.

The issue has been under constant pressure since missing analysts' estimates by $0.02 in the second quarter.

Disappointing Q2 Results

Since that miss, shares have declined from $56.07 a share to the $34.00 level. In Friday's session it reached its lowest mark since April 2013, when it bottomed at $30.07.

That is quite some distance from its all-time high of $97.28 that was made in January of this year. At that time, it was the darling of Wall Street along with other stocks in the sector such as Stratasys, Ltd., Voxeljet AG and ExOne Co.

Bad Timing By Analysts

In fact, Pacific Crest, Deutsche Bank and Jefferies all initiated coverage in December with Buy or Outperform ratings, and price targets near $100.00. RBC Capital and Stephens and Co. joined in at the beginning of this year with Outperform and Equal-weight ratings, respectively.

Unfortunately for investors, Deutsche Bank and Pacific Crest did not downgrade the issue until October, after it had lost nearly two-thirds of its value from its all-time high.

Related Link: Unravelling Adobe's 3D Printing Strategy

Not Good News From The Sector Leader

If one's looking for clues from 3D Systems' peers, the outlook is not so rosy. Last week, Stratasys beat analysts' third quarter expectations, but issued weak guidance. Instead of $2.30 for fiscal year 2014, the company expects to earn between $2.21 and $2.31.

As a result, Stratasys shares fell from the $120.00 area to near $102.00 in recent sessions.

Ciaccia Not Optimistic For The Long Haul

For those searching for an optimistic view on the issue, do not look for it from Chris Ciaccia, the Technology Editor at TheStreet.com. On last Friday morning's Premarket Prep, Ciaccia referred to 3D Systems as the “red-headed step child in the sector.”

Stratasys is the clear leader for now, he added, mentioning he's wary of other stocks in the space as Hewlett-Packard has plans to enter it.

Ciaccia doesn't predict a “whole lot of upside, except for a one-day or two-day pop.” With “sentiment so low,” an upside surprise may instigate a brief rally, but nothing more.

If a rally unfolds, he said, shares could “eventually...trade at lower levels.”