Why 3D Systems Stock Fell 23% in March

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What happened

Shares of 3D Systems (NYSE:DDD), a diversified 3D printing company, dropped 23.4% in March, according to data from S&P Global Market Intelligence

For context, the S&P 500 index returned 4.4% last month.

Image source: Getty Images.

So what

We can attribute 3D Systems stock’s weak performance last month largely to investor disappointment related to the company’s March 1 release of its fourth-quarter and full-year 2020 results. Shares plunged 19.6% the next day.

The two main reasons investors were likely not happy:

  • Results were only preliminary, as the company was delayed in filing official (audited) results.
  • Management didn’t issue revenue or earnings guidance.

Data by YCharts.

Now what 

Reiterating what I wrote in my Q4 earnings article:

3D Systems made good progress in its turnaround in 2020: It cut costs, it paid off its debt, and it ended the year on a solid note. In Q4, it grew revenue year over year (albeit very modestly) and was profitable on an adjusted basis. Moreover, it also achieved slightly positive GAAP [generally accepted accounting principles] operating income.

That said, investors shouldn’t throw all caution to the wind. The stock is very loftily priced after soaring 270% in 2021 through Monday’s [March 1] regular trading session.

For the first quarter of 2021, Wall Street is expecting 3D Systems to post adjusted earnings per share (EPS) of $0.01 on revenue of $136.4 million. In the year-ago period, the company had an adjusted loss per share of $0.04 on revenue of $134.7 million. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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