Curious About 3D Systems? Wait for the Conference Call

This article from Feb. 26 has been updated to note 3D Systems is reporting delayed earnings until March 15, before the bell. Earnings had been scheduled for Feb. 29. Prices have been updated.

3D-printing companies have been trying to live up to the hype of three-dimensional products for years, starting with one of the bigger companies, 3D Systems (DDD) , which reports delayed fourth-quarter earnings Tuesday, March 15, before the open. Earnings had been expected on Feb. 29.

There is a lot that is impressive about 3-D printing, once proclaimed as the "new frontier" in architecture mockups and product design. The same can't be said about the 3-D printing stocks.

3D Systems' shares, at around $12, are up close to 40% for the year to date, but down close to 57% for the past 52 weeks. That is for the same two periods the S&P 500 has been down 2%. It would seem, however, that sentiment has begun to change. Much of which can be linked to the market establishing more realistic expectations.

If the beleaguered 3-D specialist beats Wall Street estimates Tuesday and issues "less worse" guidance, it could signal the stock has seen the worse of its decline and an uptrend may be imminent.

For the quarter that ended December, analysts, on average, expect 3D Systems to earn 3 cents a share on revenue of $167.52 million, translating to year-over-year declines of 85% and 10.6%, respectively. For the full year, earnings are projected to decline from 70 cents a share to 10 cents a share, while revenue of $651.81 million would mark a slight decline of 0.30% from the year-ago quarter.

The earnings report will put an end to what has been a brutal year for 3D Systems. The projected decline in earnings for both the quarter and full year -- as bad as they seem -- are likely already priced into the stock.

But given the struggles the company has faced, including missing earnings estimates in two straight quarters and missing revenue targets in three straight, don't go rushing in here. At the very least, wait to hear what management has to say about its business outlook for fiscal 2016.

3D Systems is going to need to spend money to separate itself from an industry that includes Stratasys (SSYS) and The ExOne Company (XONE) . For 3D Systems, higher spending without sustainable revenue won't work. So unless you want to make a speculative bet, stay away.

 

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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