Yesterday a post by a Seeking Alpha contributor says 3D Systems (DDD) maybe overvalued and Sratasys (SSYS) has emerged as the chief competitor of 3D Systems (DDD) in the industry.
Shares of 3D Systems (DDD) and Stratasys (SSYS), two of the hottest stocks the past year, fell yesterday. 3D Systems declined 14 percent to $59.50 at the close in New York, for the biggest drop since Oct. 27, 2011. 3D Systems has gained over 250% in the last year, and Stratasys has over 100%. Another stock Proto Labs (PRLB) a 3D printing service company, declined more than 7%.
Multiple other companies, such as Stratasys (SSYS), have a realistic shot at stealing the crown. In fact, many people believe that with Stratasys' merger with Objet, they already have. Considering this, it seems as if it's a little bit of a gamble to have such confidence in 3D Systems.
Multiple valuation numbers indicate that 3D Systems is at least slightly overvalued. It's trading at just over 100 times earnings, its price/sales ratio is 12.34, and the price/book is 9.54. Also, the short interest as a percentage of the float is 42.10%, showing that many investors have already caught on to the possible tumble for the stock in the near future.
Last week, Maxx Chatsko wrote on The Motley Fool an article "Are investors 3D printing a bubble?", he said:
"People who have never invested a dime in the stock market their entire lives are asking me about 3D Systems and frothing at the mouth to get in at ($60 per share)." That worries me because I've fielded more than one question about 3-D printing companies from friends with little to no investing experience. Gains of several hundred percent make great water cooler talk, but they could be a dangerous trap for investors.
He recalled the dot-com bubble and said there were similarities: "the dot-com bubble grew to historic heights as investors overlooked valuation metrics and put their faith in the awesome potential future of the Internet."
Yesterday, another company in the 3D printing space disclosed terms for its IPO. ExOne, which sells 3D printers to industrial customers, stated that it plans to raise $75 million by selling 5 million shares at a price range of $14 to $16. In mid-afternoon trading, 3D Systems plunged 12% to $60.59 while Stratasys sank 10% to $78.48.
Stratasys didn't announce any big news yesterday. but 3D Systems (NYSE:DDD) responsed with a press release: "in view of the unusual market activity in the company's stock, the New York Stock Exchange has contacted the company in accordance with its usual practice; the company stated that its policy is not to comment on unusual market activity."
Posted in 3D Printing Company
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