The world of 3D printing stocks should have been shaping up for a great Wednesday, if you only looked at the news on Tuesday evening. Oppenheimer initiated coverage on the group positively late Tuesday, but the industry has a gorilla on its neck after leader 3D Systems Corp. (NYSE: DDD) issued guidance that was lower than expected.

24/7 Wall St. wanted to see what 3D systems had to say, and then to see what Oppenheimer’s report may have hinted at that still had relevance for the rest of 2014 and into 2015. There may be a silver lining here for those wanting a fresh look after a serious pullback.

3D Systems was started as Outperform with a $57 price target. Shares closed at $43.38 close Tuesday, but after 40 minutes of trading Wednesday, we saw the stock down 145 at $37.20, and the 4 million shares traded was already above a full day’s average volume.

Oppenheimer also started ExOne Co. (NASDAQ: XONE) as Outperform with a $35 price target, versus a $21.56 close. This one was actually up 3% at $22.20 more than 30 minutes after Wednesday’s open — not bad considering a $20.95 opening price. Stratasys Ltd. (NASDAQ: SSYS) was started as Perform at Oppenheimer.

24/7 Wall St. has included the disappointing news from 3D Systems itself, and then we finished with the Oppenheimer analyst detailed commentary on each of the 3D printing stocks covered.

3D Systems issued guidance that was obviously disappointing. The company expects third-quarter revenue of $164 million to $169 million, with a sequentially growing order book of $42 million. It further put its adjusted earnings from operations in a range of $0.16 to $0.19 per share. Thomson Reuters had estimates of $0.21 in earnings per share and $186 million in revenues.

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The admission was that strengthening sales of design, manufacturing and health care products and services were not enough to overcome the revenue shortfall from the continued manufacturing capacity constraints for its direct metals printers and delayed availability of its newest consumer products. At the end of the third quarter, the company brought online a second direct metal 3D printers’ manufacturing line and began commercial shipments of its latest consumer printers.

3D Systems also used the third-quarter shortfall to address the full year of 2014. Management is now calling for revenues of $650 million to $690 million and adjusted operating earnings of $0.70 to $0.80 per share. Thomson Reuters had earnings estimates of $0.78 per share on just over $707 million in revenues.

Avi Reichental, 3D Systems president and chief executive officer, said of the quarter,

We are disappointed that we failed to fully capitalize on the robust demand for our direct metal and consumer products during the quarter. While we worked very hard to deliver these products sooner, achieving manufacturing scale, quality and user experience targets took significantly longer than we had anticipated. … Now that we have closed these availability gaps, we expect our revenue growth rate to increase. … Our accelerated investments in new products and acquisitions contributed to a record order book in every period of this year, but disrupted revenue generation and pressured our gross profit margins. Now that we are shifting our attention to fine-tuning these investments, we expect to leverage them into a valuable and sustainable first-mover advantage.

Oppenheimer’s Holden Lewis started 3D Systems as Outperform with a $57 price target. The note was based on valuation, pessimism and comparisons setting the stage. That was before the earnings were telegraphed, but he said:

As one of the two largest companies in the 3D space, it should gain from good secular growth. The sector’s “vision play,” it has led in building a vast portfolio of 3D products/services. The dispersion of energies can yield uneven results, as in 2Q14, which can cause dramatic swings in sentiment. Currently, pessimism is high as reflected in valuation and short interest. But as results smooth and accelerating growth resumes in 2H14, we think it can spark a rotation back toward 3D Systems, generating outperformance.

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Stratasys was started at Perform, but Holden Lewis suggested that, in the short term, investors have overvalued sector safety. Lewis said:

Stratasys taps the sector’s secular growth, and its market position, installed base, resources, and record of execution has made it one of the best performing 3D names of late. In our view, it deserves its reputation as the ‘safety’ 3D play. Still, we think that safety has been overvalued near term. Stratasys remains in investment mode and should have M&A related dilution in 2016 that may result in relative fundamental performance that is not as great as currently expected. As such, the shares may lag its peers in the space in the short term.

ExOne was started Outperform with a $35 price target over the next 12 to 18 months. Holden Lewis noted easing spending, building leverage and narrowing losses. He said:

ExOne has lagged in 2014 with losses widening amid heavy investment. These fortunes may be set to reverse. Sector-leading growth remains healthy heading into 2015, so scale should build. Simultaneously, spending rates should cool and learning curve-related costs may fall away, the net effect likely being better leverage and a sharp narrowing of losses. The year 2015 has always been where rising volumes were likely to meet improved capability and rising productivity. If management can execute to that, it could improve sentiment and valuation.

The timing of this call was very unlucky for the few investors who paid up at $43.38 for almost 13,000 shares, and over 20,000 shares in the after-hours session Tuesday, after the 3D Systems upgrade hit the news wires. That being said, this pullback does at least allow for new investors to get a view on valuations that perhaps not all 3D stocks will be treated the same after 2014.

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