Tuesday, January 6, 2015

3D Printer Stocks: Is It Time For Bottom Fishing?

Disclosure: I own 3D Systems and Voxeljet stocks. After enjoying a strong 2013, 3D printer stocks dropped out of favor with Wall Street in 2014. For a good reason: Sales momentum has tapered, even among industry leaders like Stratasys and 3D Systems --  Stratasys’ (NASDAQ:SSYS) revenue growth has halved. Apparently, investor expectations have raced ahead of company fundamentals. But with prices of these stocks correcting sharply, valuations are now more reasonable than in 2013. Stratasys, for instance, is trading at a forward PE of 27.57, down from 50.23 fourteen months ago. 3D Systems trades at a forward PE of 31.17, down from 54.57. Does this mean it is time for investors to go bottom fishing in these stocks? Industry analysts seem to think so, as they have maintained their recommendations, and in some cases (e.g., Stratasys), price targets. Forecasters are still optimistic about the industry’s prospects over the next decade – the industry expected to grow from $1billion to $7 billion by 2025, according to IDTechEX. And a pick up in M&A activity may give 3D stocks an additional boost. Financials of the Four Major Players as of 11/13/2013

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