At the beginning of this year, 3D Systems Corporation (NYSE:DDD) stock was trading above $96.42. On Monday, the stock closed at $28.38, down 70% year-to-date. Meanwhile, the number of shares held short has spiked from 14.69 million to on January 1 to 36.69 million shares at the end of November. Despite a massive decline in the stock price, Longbow Research analyst Joe Wittine said last week that the stock was still trading at a “premium valuation.”
MakerBot more popular than 3D Systems’ Cube
In terms of market value, it has lost ground to Stratasys, Ltd. (NASDAQ:SSYS). 3D Systems currently holds 18% market share in the 3D printing industry. It has the most diverse range of products with seven different product lines. 3D Systems is expanding mainly through mergers & acquisitions. Last month, it acquired 3D CAD/CAM software company Cimatron for $97 million.
Lower-than-expected industrial adoption, prompted 3D Systems and Stratasys to turn their focus to home-based users. Stratasys’ MakerBot and 3D Systems’ Cube are the most popular brands available in the market. But, according to a survey conducted by Bidness ETC, MakerBot was the most popular 3D printer during the Black Friday weekend.
More than 58% suppliers and retailers said that Stratasys’ machine outsold Cube. The biggest reason behind the popularity of MakerBot is that it is compatible with almost every filament brand available in the market, including cheap Chinese ones. A 3D Chimera employee said that many customers who purchased Cube would return it because it is compatible with filaments from 3D Systems.
Chinese vendors pose a big threat to 3D Systems
What’s more, Stratasys and 3D Systems are also facing stiff competition from smaller rivals such as XYZ Printing, Flashforge, Afinia and LeapFrog. 3D Systems’ Cube has been widely criticized in the past few months, though the company has addressed many of these concerns. A respondent at the American 3D Printing told Bidness ETC that the old Cube was a very bad machine, but the new one has proved to be very good.
Big companies such as HP (NYSE:HPQ), Canon and Epson are entering the 3D printing market to intensify the competition. However, the biggest threat to 3D Systems at this point seems to be Chinese competitors that continue to enter the U.S. market. Chinese vendors have dramatically brought down the average selling prices (ASPs).
3D Systems shares fell 0.35% to $28.28 in pre-market trading Tuesday.