Bloomberg News

3D Systems Drops on Report of Three-Dimensional Printing Bubble

January 28, 2013

3D Systems Corp. (DDD:US) 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:US), 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 okharif@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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Companies Mentioned

  • DDD
    (3D Systems Corp)
    • $48.75 USD
    • -1.57
    • -3.22%
  • SSYS
    (Stratasys Ltd)
    • $125.3 USD
    • -3.98
    • -3.18%
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