Shares of the three dimensional printing company fell more than 10% during 3D's first-quarter earnings conference call, shortly after the open. The price action sparked debate on StockTwits.com about whether momentum sectors, such as 3D printing and social media, were in the midst of a correction in which investors would keep selling, regardless of news, until multiples shrank significantly.
3D reported EPS of 15 cents per share, excluding some items such as stock-based compensation. That number met analysts' expectations, according to consensus estimates on the Analyst Ratings Network. First-quarter sales grew 45% from the prior year to $147.8 million, beating analysts' estimates by a couple million.
$DDD another 1 reporting decent ER being sold, you just have to accept that regardless of news, hot money to buy these stocks has run out...
-- Jean Fonteneau (@JFinDallas) Apr. 29 at 09:57 AM
However, guidance disappointed. Management reiterated expectations for revenue at between $680 million and $720 million for the year. It expects earnings excluding some items should be between 73 cents and 85 cents. The midpoint of that number, 79 cents, is below the 81 cents analysts anticipated, according to stats on Yahoo! Finance.
On the conference call, analysts asked pointed questions about 3D's acquisitions, such as Brazil-based 3D products distributor Robotec and entertainment modeling company Gentle Giant Studios. Specifically, they wanted to know why guidance wasn't higher given the growth promised by these purchases.
Management said that the company had not fully integrated all of the acquisitions yet. They promised higher profits and margin growth in the second half of the year.
Some investors believed management erred on the side of caution. They anticipated profits and shares climbing in the second half of the year.
But many investors were not convinced. Some argued that 3D's valuation simply became too frothy late last year when investors celebrated a near future in which 3D printers would become ubiquitous in factories, doctor's offices and even homes. At the time, people talked about 3D printed concrete homes, shoes printed in the U.S. rather than manufactured in Malaysia, and prosthetics printed to perfectly fit amputees. SSYS) fell more than 4% Tuesday morning. ExOne ( XONE) fell more than 1.4%. At one point, 3D's market cap soared to nearly $10 billion. It is now half that -- and falling. The stock is down more than 49% from its all-time closing high of $97.28 hit in January. It still trades around 37 times expected 2015 earnings.
$DDD Lowball your earnings last year to setup for out performance in 2014.
-- Dan Starr (@DanStarr) Apr. 29 at 09:30 AM
Bullish sentiment on the stock dropped to 77% Tuesday, according to StockTwits' analytics. It was in the 90s earlier this month. Still, the size of today's drop surprised many investors, especially given the stock's performance this year.
$DDD Even after 50% discount in EPS in a matter if weeks, stock is still being trashed after beating on revenue (+45% Y/Y). Just amazing!-- Stats Pro (@statspro) Apr. 29 at 08:17 AM
Apr. 29 at 09:59 AM
At the time of publication the author held no positions in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.