3-D Printers on Watch Following Negative Piece (DDD) (SSYS) (VJET)

3-D printers are lower Monday following a bearish report in Barron's made over the weekend.

Barron's noted that names like 3D Systems (NYSE: DDD), Stratasys (Nasdaq: SSYS), ExOne (Nasdaq: XONE), and voxeljet AG (NYSE: VJET) have seen strong gains over the last two years (less for voxeljet and ExOne) and, while potential for the segment is still strong, investors might be overpaying for any further upside.

3D Systems announced several new printers at 2014 CES along with a collaboration with Hersey (NYSE: HSY) for a chocolate-printing machine. However, the company keeps missing its own earnings estimates and recently cautioned that Q4 results would be lighter than expected. Analysts in 2013 were looking for the company to report profit of $1.31 per share in 2014 and that has since been lowered to $.82 per share. While profit estimates are down 37 percent, shares have gained 110 percent on increasing expectations.

While profit is expected to be $85 million with revenue of $702 million in 2014, it currently goes for around 84 times earnings. Looking at a valuation of 13 times 2013 revenue expectations and the stock is still one of the most-expensive stocks in the S&P 500. Stratasys, ExOne, and voxeljet also carry double-digit sales multiples.

Stratasys has an installed based of about 65,000 printers globally and analysts expect the company to grow revs 39 percent in 2014 ti $674 million with profit of $117 million ($2.21 per share).

Voxeljet, with a market cap around $540 million, sold just three printers in its most recent quarter, for revenue f $2.5 million. The company should post revs of $18 million with net profit of $1.1 million in 2014.

Hedge fund giant Whitney Tilson, of T2 Partners, said 3D Systems was a dream short recently, and has been adding to his position. He commented to Barron's, These stocks are being valued as if this is the next coming of the iPhone and iPad combined ... [Walking around at CES, he said] There was booth after booth of companies with very similar products to 3D Systems. And at lower prices.

3D Systems also saw a giant pop following an announcement last May that the company's Cube printers would be sold at Staples (Nasdaq: SPLS). One-year on, industry analyst Brian Drab, from William Blair, noted that he recently phoned up 112 Staples locations. Only four had the Cube on display with confirmation of just two sales being made. Since launching its consumer segment in 2012, the company has said it sold around 22,000 consumer-focused units, though it didn't issue commentary to Barron's for last weekends piece.

So, what should investors look at if 3-D printing continues to take off? One name would be software play Autodesk (Nasdaq: ADSK), which would better be able to capitalize on software for the segment.

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