3D Systems Corporation (DDD) Passes Into Oversold Territory

Updated on

3D Systems Corporation (NYSE:DDD) shares haven’t been doing so well since the first of the year, but one indicator suggests that this might be about to change. Writing on Forbes, DividendChannel.com notes that the company has just become undersold, which means some investors might want to get in on it.

Examining the RSI on 3D Systems

The Relative Strength Index, or RSI, measures a company’s momentum. Whenever a stock’s RSI drops under 30, it means that the stock has become oversold. On Monday, 3D Systems Corporation (NYSE:DDD) shares hit an RSI reading of 27.8 after shares dipped to $62.77 a share. That’s less than half the RSI of the S&P 500 ETF, which is 58.2. This would suggest to some that the heavy selling which has been going on could run out, which would be a good thing for 3D Systems. 3D Systems Corporation (NYSE:DDD) shares have a low of $27.88 a share in their 52-week range. The high point is $97.28 a share

3D printing stocks as a whole have been performing quite well over the last few months, and 3D Systems Corporation (NYSE:DDD) has been riding high on that performance. In fact, the company has been doing so well that its forward price-to-earnings ratio is significantly higher than that of fellow 3D printer maker Stratasys, Ltd. (NASDAQ:SSYS).

Firm upgrades 3D Systems

Stephens upgraded its rating on 3D Systems Corporation (NYSE:DDD) from Equal Weight to Overweight. However, the firm hasn’t set a price target on the company, according to 24/7 Wall Street writer Paul Ausick.

The consensus price target for 3D Systems Corporation (NYSE:DDD) is just shy of $87 a share, and the stock closed under $64 a share last night. That consensus price target implies an upside of about 35%, which puts the stock into “value trap territory,” according to Ausick. He notes that 3D Systems’ forward P/E ratio is over 53, while its 12-month trailing P/E is almost 144 and its sales multiple is nearly 13.

On the other hand, Stratasys, Ltd. (NASDAQ:SSYS) has a forward P/E/ ratio of less than 39 and a consensus price target of about $145 a share. This is a 30% implied upside, with an 11.43 sales multiple. He believes both Stratasys and 3D Systems Corporation (NYSE:DDD) may be overvalued, but 3D Systems more so than Stratasys.

Leave a Comment