3D Printer Stocks Print Some Red Ink Plus Other News (XONE, SSYS, DDD & MDDD)

We are two trading weeks into the new year and the 3D printing sector along with 3D printer stocks like ExOne Co (NASDAQ: XONE), Stratasys, Ltd (NASDAQ: SSYS), 3D Systems Corporation (NYSE: DDD) and Makism 3D Corp (OTCBB: MDDD) have been printing their share of red ink for investors – despite the fact that 3D printing got  plenty of attention at last week's Consumer Electronics Show in Las Vegas while the broader stock market rally has largely held up. With that in mind, here is the latest 3D printer stock or sector news you need to be aware of:

ExOne Updates 2013 Revenue Expectations. On Tuesday, ExOne Co announced that it expects 2013 revenue to be in the range of $40 million to $42 million verses a previous revenue guidance of approximately $48 million. The shortfall is being blamed on machine sales not yet completed for customers in Russia, India, Mexico and France because some of these sales involved approval processes that were deferred into 2014.  The Chairman was quick to point out that the company has not lost a single order and expects the sales to be completed in the first half of this year. He concluded by saying: "We remain confident that our previously stated long-term 40% to 50% annual organic revenue growth goal is achievable again in 2014." Wall Street opinion is mixed, with Weston Twigg, an analyst at Pacific Crest Securities, writing in a research note:

"When we launched coverage of ExOne, we warned that the company faced execution risks as a small, unproven entity. We would remain on the sidelines until ExOne can demonstrate better execution toward its relatively aggressive growth goals."

ExOne Co is now down 14.8% over the past three trading days, but the stock is still up 114.4% since last February.

Stratasys Ltd Issues Guidance. On Tuesday, Stratasys Ltd also issued its 2014 guidance, giving revenue guidance of $660 to $680 million, non-GAAP net income guidance of $113 to $119 million (or $2.15 to $2.25 per diluted share) and GAAP net income guidance of $10.5 to $19.9 million (or a $0.20 to $0.38 per diluted share). Apparently, the analysts' consensus estimate for revenues was $656.83 million and EPS of $2.33. Stratasys Ltd reported that operating expenses are projected to expand significantly in 2014 thanks to investments in sales and marketing programs to "drive future market adoption," as well as by higher R&D investments to fund technology innovation and new product development. However, Stratasys Ltd also expects Non-GAAP net income to be derived disproportionately from the second half of fiscal 2014, "driven by the projected timing of operating expenses, as well as the projected timing and success of new product introductions and their corresponding ramp in sales." Stratasys Ltd is down 8.1% over the past three trading days, but shares are up 45.7% over the past year and up 68.6% since December 2012.

Stratasys Ltd Unveils "Replicator Mini" 3-D Printer with Built-in Camera. Bre Pettis, the co-founder of consumer 3-D printer maker MakerBot, a division of Stratasys, spoke to a standing-room-only crowd at the Consumer Electronics Shop in Las Vegas last week. He talked about his intention to get a MakerBot into every school in the US and then he introduced the "Replicator Mini," a consumer printer that will cost $1,375 and will ship in the spring; along with the "Replicator Z18," that will also ship in the Spring for $2,899.   3D Systems Corporation Has a Buy Reiterated. On Monday, Deutsche Bank's Sherri Scribner reiterated a Buy on 3D Systems Corporation and raised her price target from $95 to $115. She noted:

"DDD has introduced a substantial number of new products and services at EuroMold and CES over the past month and a half. In addition, the company has been active this quarter with acquisitions, including The Sugar Labs (edible food), Figulo (ceramics), Village Plastics and Xerox's Oregon-based solid ink team. We believe the company will see additional revenue growth from these new product introductions and from the inclusion of recent acquisition, and we have raised our revenue estimates $50M and $60M for FY14 and FY15, respectively. Given our growth expectations for the industry and DDD's strong technology position, DDD remains one of our top picks for 2014."

In addition, 3D Systems Corporation attended the 16th Annual Needham Growth Conference on Wednesday with the presentation available on the company IR page here. 3D Systems Corporation is only down 5% this week but its still up 123.1% over the past year and up 583.6% since June 2011.

Industrial 3D Printer Market is Much Bigger Than the Consumer Market. Sherri Scribner was also recently on CNBC where she said that the industrial market will continue to be a bigger market than consumers for 3D printing. She added that Hewlett-Packard Company (NYSE: HPQ) will get into 3D printing on the consumer side, but then she added that there are seven different technologies under the so-called "additive manufacturing" umbrella and HP would have a place in just one of those technologies. Makism 3D Corp Bounces Back. Small cap Makism 3D Corp is a new 3D printing stock that is based in Cambridge, United Kingdom, that offers a 3D printer solution that maximizes the range of available printing materials to include ABS plastic, Nylon™, polycarbonate, high impact polystyrene, polyvinyl alcohol and others. Their flagship product is the Wideboy which features high quality British/German engineered components and (unlike competitor 3D printers) comes ready to use directly out-of-the-box:

As I mentioned last week, Makism 3D Corp along with several other OTC stocks saw trading suspensions near the end of last year; but of the stocks that got suspensions, only MDDD largely bounced back for investors while the others lost most of their value. Nevertheless, Makism 3D Corp did sink some 24% yesterday, basically giving back most of the gains made on Monday and Tuesday, on overall concerns about the 3D printing sector.

Lilly/Boehringer Candidate Under EU Review - Analyst Blog

Eli Lilly and Company (LLY) and Boehringer Ingelheim recently announced that the European Medicines Agency (EMA) has accepted their marketing authorisation application (MAA) for LY2963016.

The companies are looking to get LY2963016 approved for type I and II diabetes under the EMA's biosimilar pathway. LY2963016 is a new insulin glargine product.

LY2963016 has been developed under a collaboration agreement between Eli Lilly and Boehringer Ingelheim which was signed in Jan 2011. The companies had signed a global agreement for the joint development and commercialization of several diabetes compounds.

The compounds covered by the agreement include Tradjenta (linagliptin) which is currently approved in the US, Japan, Europe and other countries, empagliflozin and the new insulin glargine product. Boehringer Ingelheim also has an option to co-develop and co-commercialize Eli Lilly's anti-TGF-beta monoclonal antibody.

We note that Eli Lilly and Boehringer Ingelheim had submitted a New Drug Application (NDA) for empagliflozin in the US earlier this year. Empagliflozin is also under regulatory review in the EU.

Eli Lilly currently holds a Zacks Rank #3 (Hold). The biggest near-term challenge for Eli Lilly will be to replace the revenues that will be lost to generic competition now that Zyprexa has lost US and EU exclusivity. The generic threat will continue to pose challenges for Eli Lilly with Cymbalta slated to lose patent protection in late 2013 and Evista in 2014.

On the flip side, the Animal Health business and the diabetes franchise should provide some downside support. We are encouraged by the company's efforts to strengthen its diabetes portfolio. We are also pleased to see Eli Lilly pursuing small acquisitions and in-licensing deals to boost its pipeline.

Companies that currently look attractive include Santarus, Inc. (SNTS), Jazz Pharmaceuticals (JAZZ) and Auxilium Pharmaceuticals (AUXL). While Santarus and Jazz are Zacks Rank #1 (Strong Buy)! stocks, Auxilium is a Zacks Rank #2 (Buy) stock.