Investors who have owned stocks since 2016 generally have experienced some big gains. In fact, the SPDR S&P 500’s (NYSE: SPY) total return in the last five years is 117.3%. But there is no question some big-name stocks performed better than others along the way.
3D Systems’ Bumpy Ride: One company that has given investors whiplash in the last decade is 3D printing stock 3D Systems Corporation (NYSE: DDD).
3D Systems was one of the biggest booms and busts of the early years of the post-financial crisis bull market.
In early 2009, the stock was trading under $6, but it reached a peak of $97.28 by early 2014. By the time the beginning of 2016 rolled around, the stock was trading all the way back down at around $8.50.
During the peak of the 3D printer market mania, bulls justified absurd market valuations by arguing that 3D printers would ultimately be as common in U.S. homes as microwaves.
The slight oversight in that thesis ended up being that nobody actually needed or wanted 3D printers.
In hindsight, the idea that 3D printers would follow the same growth trajectory 2D printers followed makes little sense. 3D printers are far more expensive and difficult to buy, use and maintain than 2D printers.
3D Systems shares dropped as low as $6 in early 2016 during a broad market sell-off due to concerns about slowing growth in China. The stock bounced off that level and eventually peaked at a multiyear high of $23.70 in mid-2017.
Over the next three-and-a-half years, 3D Systems shares continued to be extremely volatile, making a series of lower lows along the way. Prior to the pandemic, the stock made it as high as $12.56 in early 2020.
3D Systems In 2021, Beyond: 3D Systems shares dropped as low as $5.20 when the market bottomed in March 2020. However, it was one of few stocks that made new lows later that year. 3D Systems shares bottomed out at $4.60 in the second half of 2020, their low point of the last five years.
Incredibly, 3D Systems shares that seemed to be dead in the water skyrocketed in January 2021 when the company announced the sale of its non-core software business and guided for fourth-quarter revenue growth above analyst expectations.
Momentum traders triggered a short squeeze in the stock that sent it skyrocketing as high as $56.50, its highest point of the last five years. The stock has since pulled back to around $35.01.
3D Systems investors who bought five years ago and held on were bailed out by the short squeeze. In fact, $1,000 in 3D Systems stock bought in 2016 would be worth about $3,383 today.
Looking ahead, analysts are extremely skeptical 3D Systems will hold onto its gains in the next 12 months. The average price target among the seven analysts covering the stock is $22, suggesting 37.5% downside from current levels.
(Photo: 3D Systems.)
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