It is not unusual to see analysts calling for big upside in certain stocks with Buy and Outperform ratings. If they are Dow Jones Industrial Average stocks, the typical upside call is usually close to 10%. Then there is the world of small-cap stocks, where analysts sometimes have upside price targets of 35%, 50% or even 100%.

3D printing’s prior explosive growth has turned into a career killer for many investors and bulls who have staked their reputation on the segment. After all, that endless growth in 3D printing has just run into a lot of stumbles and disappointments.

What has been seen so far is that there is a huge upside call for ExOne Co. (NASDAQ: XONE), preceded by a value call for Stratasys Ltd. (NASDAQ: SSYS) and close to an outright abandonment of 3D Systems Corp. (NYSE: DDD).

Oppenheimer’s Holden Lewis has reiterated his Outperform rating and $26 price target on ExOne, after remodeling the stock after the company’s earnings report earlier in June. That implies that shares are worth over 100% more than the current share price. Lewis said:

We are adjusting ExOne’s model for its June 11 earnings release. Investors should not over-react to a seasonally volume-poor period in a company completing an aggressive build-out. Yes, 0% gross margin is mind-boggling, and its net loss exceeded revenues, but we think this is mostly a function of scale; if volumes ramp, its margin issues likely melt away quickly. We remain optimistic about the top-line outlook on management tone and adoption-implying PSC growth. ExOne cannot work at current volumes. However, if its unique product gains traction in the market over our forecast horizon, as we believe it will, it represents a compelling value and justifies our Outperform rating.

What stands out here is that shares of ExOne have been stuck at low levels for about two months. Much of the interest in the 3D printing sector has dwindled. Losing 30%, 50% or far more of your investment tends to do that.

There are of course some cautionary things here, and some ongoing risks that are far greater than in traditional well-established companies. One risk is that this analysis is back-end loaded for the year, and with some cautious optimism.

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Oppenheimer steepened the ramp in the second half of 2015 estimates, with margin being key at the exit of this year. Lewis isn’t offering full credit in his -$0.60 2015 EPS estimate from the prior estimate of -$0.40 EPS. With modest leverage, Lewis now sees a loss of $0.05 per share in 2016, versus a prior breakeven expectation.

Where the story gets interesting is that the 2017 EPS estimate remains unchanged at $0.35. In short, that values ExOne at 25 times 2017 expectations for a company that is 1) losing money now with no real margins and 2) that has punished shareholders who stuck by this company.

Oppenheimer believes the light machine business miss wasn’t really a miss — it put six machines in the hands of customers and only got credit for two. Lewis further sees non-machine volume suggesting that traction is being gained. If you combine these two issues for a single quote, Lewis said:

At some point revenue for each should get booked and follow-on from consumables/services should pull through. With the outline of the low-hanging fruit in the pipeline, reiterated revenue guidance doesn’t appear completely out of reach. … We believe service bureaus are a precursor to 3D adoption. Along those lines, that two leased machines in the quarter were to existing PSC customers, and that total revenues were up 18%, are favorable signs of adoption of ExOne’s technology.

Additional risks come from margins being tied to revenues. How margin plays out with higher orders is key to Oppenheimer’s long-term model. The firm also noted that ExOne had a faster cash burn rate than it wanted to see. Still, they believe ExOne has plenty of cash if it can narrow its losses.

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As for Stratasys, this was recently covered more in-depth. Oppenheimer’s Holden Lewis previously raised Stratasys to Outperform from perform, and he assigned a $50 price target that is still about one-third higher than the current share price of around $38 and even higher than the $35 share price back when he upgraded Stratasys.

At that time, Lewis said that Stratasys offered relative value with unique technology that is hard for a competitor to duplicate.

At the same time that Stratasys was raised, Oppenheimer lowered 3D Systems to Perform from Outperform, and it eliminated its prior $38.00 price target. That stock was at $22.50 after that call, but its shares were lower and under $21.50 on last look. 3D Systems was the leader here, and its long-term growth story eventually became more than just overly ambitious.

With shares at $12.30, a $26.00 price target implies more than 100% today in ExOne. Now investors have to decide whether they will trust a 3D printing call with massive upside. After all, ExOne has a 52-week range of $11.86 to $48.66.

That $26 target is just $1.00 short of the highest price target of all analysts and compares to a $15.50 consensus analyst price target for ExOne.

Investors might at least keep some caution in mind here. 3D printing has been a boulevard of broken dreams over at least the past year. Imagine what happens if those zero gross margin rates continue for longer than this report is assuming. Anyhow, now you have at least been reminded of the risks in what still feels like a very aggressive analyst call.

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