Should you invest in 3D Systems stock in July?

3D Systems Corp (NYSE:DDD) shares gained 42.33% this week after announcing a deal with CallPlant to see the two companies develop bio-printed solutions for improved breast reconstruction treatment. The announcement comes following 3D System’s solid quarterly performance last month. The stock is now up 285% this year and over 510% in the previous 12 months.

Is DDD stock overvalued?

3D Systems shares trade at a steep forward P/E ratio of 91.20. The stock looks significantly overvalued, considering analysts expected earnings to fall by 107% this year before growing by 13.90% in the following 12 months.

However, the company is making significant developments, as highlighted by this week’s deal. It offers exciting long-term growth potential. 

Technical overview: pullback seem imminent

Technically, this week’s rise suggests a pullback could be imminent. Earnings growth expectations offer little excitement, meaning the short-term upside potential could be limited.

Investors can target pullbacks at approximately $35.73 and $31.53. The key resistance levels are $44.61 and $48.57.

Bottom line: It may be best to wait for a pullback before opening a bullish position

In summary, although 3d Systems offers exciting long-term opportunities. It may be best to wait for a pullback before opening a buy position.