Saturday, 2 March 2024

Why Shares of 3D Systems Are Plummeting This Week

by Earn Media

After sliding by 11% last week, shares of 3D Systems (NYSE: DDD) have extended their decline this week after the company reported disappointing fourth-quarter results on Tuesday.

According to data provided by S&P Global Market Intelligence, as of the market’s close on Thursday, 3D Systems was down by 16.5% from the end of trading last week.

“Significant headwinds” plagued the company last quarter

3D Systems reported fourth-quarter revenue of $114.8 million, well shy of analysts’ expectations for $126.6 million on the top line. Similarly, the company came up short of earnings estimates. While the analysts estimated the company would report a $0.01 loss per share, 3D Systems reported an adjusted loss of $0.11 per share.

Addressing those results, President and CEO Jeffrey Graves suggested they “reflect the significant headwinds created by ongoing macroeconomic and geopolitical volatility.”

The company’s uninspiring guidance for the first quarter also contributed to investors’ decisions to click the sell button. Although analysts expect the company to report sales of $508.4 million in Q1, management only projects sales of $475 million to $505 million.

Wait for the headwinds to subside before buying shares

Those who see this stock’s sell-off as a potential buying opportunity should not rush to add the 3D printing specialist to their portfolios. The company has suffered acutely from macroeconomic factors and geopolitical tension, and those headwinds likely won’t abate in the near term, so it’s quite possible that it will continue to struggle for the foreseeable future. Consequently, it’s likely that the stock’s decline won’t reverse course anytime soon.

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Scott Levine has positions in 3d Systems. The Motley Fool recommends 3d Systems. The Motley Fool has a disclosure policy.