3D Systems Corporation (NYSE:DDD) shares went on a tear through the beginning of this year and then have been mostly declining ever since, mainly because the 3D printing market has been hot. However, that could be about to change, if analysts and experts are correct. Today CNBC‘s Jim Cramer was one of several to question 3D Systems and the rest of the 3D printing market as a whole.
3D Systems shows classic negative trading pattern
Speaking on Squawk on the Street, Cramer said Apple Inc. (NASDAQ:AAPL) had been the stock he was most often asked about. However, it has been replaced by 3D Systems Corporation (NYSE:DDD). In fact, he said 3D Systems has “one of the worst head and shoulder patterns” he has ever seen. Shares of the company’s stock have been highly volatile, surging from $30 up to $96 in just months before plummeting down to $61.
Cramer’s not the only one questioning 3D Systems Corporation (NYSE:DDD) and the rest of the 3D printing industry. The Slant, writing on Investor Place, noted three areas of concern. First, short interest in the company hit 25% of the unrestricted stock available for trading at the end of February. That is the highest level since October, and it amounts to 24.5 million shares. He notes that the story is similar with rival Stratasys Ltd. (NASDAQ:SSYS).
In addition, 3D Systems Corporation (NYSE:DDD)’s CEO recently sold off nearly 67,000 shares of the company’s stock at around $60 a share. Although he still owns more than 1.5 million shares, his sale could mean something, the author argues. In addition, he said 3D Systems has been rapidly gobbling up competitors so that it can become a jack of all trades but master of none.
Not everyone turning bearish on 3D printing stocks
There was a bit of good news about 3D Systems Corporation (NYSE:DDD) this week. RBC Capital analyst Amit Daryani and his team think Hewlett-Packard Company (NYSE:HPQ)’s entry into the 3D printing market will actually provide some fundamental support for 3D Systems and also its competitor Stratasys Ltd. (NASDAQ:SSYS). Shares of Stratasys also declined today, falling as much as 2% in midday trading.
Hewlett-Packard Company (NYSE:HPQ) said it would be entering the 3D printing market in June of this year. The RBC Capital team expects product launches sometime around HP Discover. They expect HP to focus on the enterprise and industrial segment and that the company’s entrance into the market will ultimately validate 3D printing technology.
Cramer disagrees with Daryani, however, saying competition from Hewlett-Packard Company (NYSE:HPQ) could be bad for 3D Systems Corporation (NYSE:DDD). He also notes that rival ExOne posted a surprise loss for its most recently completed quarter. As a result he said he’s “very uncomfortable” saying that 3D Systems shares have hit the bottom, even though “a lot of people” feel that they have.