Shares of 3D Systems Corporation (NYSE: DDD) have jumped a whopping 70.1% so far in 2018, according to data provided by S&P Global Market Intelligence, as financial performance finally started to improve. In the second half of the year, the company will need to prove the performance will continue.
Continue Reading Below
The 3D printing business has been in a funk for the last three years and 3D Systems has seen revenue stagnate and financial losses mount. In the first half of 2018, there were at least some signs that a reprieve is on the way.
First-quarter revenue was up 6.1% to $165.9 million and non-GAAP loss shrunk by half to $0.03 per share. Investors are looking for even the smallest signs that operations are going to turn around in 2018 and the early results were enough to send share prices higher.
As impressive as 3D System's stock performance has been in 2018, keep in mind that shares are bouncing off an extreme low and are still down 83% from the start of 2014. Investors are speculating that we're at the beginning of a turnaround, but if that doesn't hold true, the stock could reverse all of its gains very quickly. I will be watching revenue growth and gross margins in the second half of the year to see if there's demand for the company's products and for any pricing power to maintain margins. If either lose momentum, the stock's recovery could be short lived.
10 stocks we like better than 3D SystemsWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and 3D Systems wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of June 4, 2018