Value investors would be inclined to shy away from companies trading at such stratospheric levels. Growth investors buying into the 3D craze now are anticipating that the high POP will be supported by the same level of past growth in the foreseeable future.
As we’re now in the “Peak of Inflated Expectations” of 3D printing, according to Gartner, the stock market is taking a very close look at publicly available stocks for 3D printing companies.
Needless to say, the prices of the two publicly traded 3D printing companies, 3D Systems and Stratasys, have been exhibiting some unusual behavior. As you can see in the chart above, both Stratasys (red) and 3D Systems (blue) have grown tremendously in value since the beginning of 2012. 3D Systems had, at one point 180% growth in 9 months!
Interestingly, both stocks have taken a bit of a tumble as they are likely overpriced, driven high by those stock pickers discovering 3D printing concepts for the first time.
What happens next?
According to Gartner’s Hype Cycle model, the technology will next proceed quickly to the “Trough of Disillusionment” as people discover their hyped expectations are not real. Expect drops in the stock price, barring other developments.
Meanwhile, Kapitall says it best: