Even the best stock pickers will make plenty of bad investments. Unfortunately, shareholders of 3D Systems Corporation (NYSE:DDD) have suffered share price declines over the last year. To wit the share price is down 70% in that time. Longer term investors have fared much better, since the share price is up 33% in three years. More recently, the share price has dropped a further 18% in a month. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.
If the past week is anything to go by, investor sentiment for 3D Systems isn't positive, so let's see if there's a mismatch between fundamentals and the share price.
However if you'd rather see where the opportunities and risks are within DDD's industry, you can check out our analysis on the US Tech industry.
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
During the last year 3D Systems grew its earnings per share, moving from a loss to a profit.
When a company has just transitioned to profitability, earnings per share growth is not always the best way to look at the share price action. But we may find different metrics more enlightening.
On the other hand, we're certainly perturbed by the 6.1% decline in 3D Systems' revenue. If the market sees the weak revenue as jeopardising EPS, that could explain the lower share price.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. You can see what analysts are predicting for 3D Systems in this interactive graph of future profit estimates.
A Different Perspective
We regret to report that 3D Systems shareholders are down 70% for the year. Unfortunately, that's worse than the broader market decline of 18%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 4% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand 3D Systems better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for 3D Systems you should be aware of, and 2 of them are concerning.
3D Systems is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
What are the risks and opportunities for 3D Systems?
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
3D Systems Corporation, through its subsidiaries, provides 3D printing and digital manufacturing solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific.
The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.
|Analysis Area||Score (0-6)|
Read more about these checks in the individual report sections or in our analysis model.
Adequate balance sheet and overvalued.