In this five-year bull market, growth stocks have come in two flavors: those known as growth at a reasonable price and those known as growth at any price.

Examples of the latter include Salesforce.com, Inc. (NYSE: CRM), Chipotle Mexican Grill, Inc. (NYSE: CMG) and Tesla Motors, Inc. (Nasdaq: TSLA). Such hot stocks are disconnected from any fundamental value and are seen by their backers as such game-changers that they must be bought and held, no matter what.

Of course, some of these stock set-ups can end badly. Roughly a year ago, I asked if 3-D printing firm 3D Systems Corp. (NYSE: DDD) was the most overvalued stock on the market. Aggressive accounting practices and a risky growth-through-acquisition strategy gave me pause. However, many growth-at-any price investors dismissed such concerns in subsequent months, pushing shares ever higher until they surpassed $90.

I looked at the stock five months later and shares had tumbled back into the $60s, though I noted that “this remains a very expensive stock.” High valuations, looming patent expirations, rising competition, a lack of organic growth and margin pressures were just some of my concerns. Since then, shares have “re-rated lower,” as traders like to say.

3-D Systems’ growth-through-acquisition strategy was its undoing. The key point of making a large and rapid number of acquisitions is that the purchases broaden your product line to help your sales team generate more robust organic growth. That approach began to look dubious when second quarter results revealed that organic sales were growing at a mere 10% pace from a year ago. Considering that 3-D printing is still in its infancy, many investors expected much more from the company. Adding insult, rival Stratasys Ltd (Nasdaq: SSYS) delivered 35% organic sales growth in the second quarter. Shares of Stratasys have outperformed 3D Systems by nearly 40 percentage points over the past 12 months.  

To be sure, DDD was pushed by a legion of momentum investors. Almost every one of them has now been shaken out of this stock. And coupled with the sharp pullback, this is once again a stock to be assessed in the context of fundamental valuations. It may now even be considered a growth at a reasonable price stock.

Based on 20% top-line growth in each of the next few years, analysts expect to see a reasonable amount of earnings leverage: Consensus forecasts currently anticipate $1.15 in 2015 earnings per share, rising to around $1.50 in 2016, which translates into 26% EPS growth. Shares trade for around 25 times that 2016 forecast, suggesting a price/earning-to-growth ratio of around 1.0.

The real question for investors: Has the company’s recent acquisitive spree finally set the stage for acceleration in organic growth? Or has this company’s business model already matured? 

The 3-D printing industry has not matured. Industry analyst Wohlers Associates believes the industry is on track for 21% growth this year and robust growth rates still lie ahead. They think the industry, which had $3 billion in revenue in 2013, will garner more than $20 billion in annual revenue by 2021. That works out to be a roughly 30% compound annual growth rate. That industry growth view is backed by Stratasys and other industry players.

#-ad_banner-#So why did 3D Systems report tepid organic growth in Q2? Management cites a series of one-time events that impacted the top-line, but this company has a recent history of explaining away flaws on its financial statements, and investors now give management a lot less benefit of the doubt than they once did. The company anticipates more than $1 billion in revenue by next year, though most analysts now choose to model in 2015 revenue — up to $150 million lower than management’s view. The upcoming Q3 results may be an opportunity for management to throttle back 2015 guidance, because the only way this stock can start moving higher is if the company can enter a “beat-and-raise” cycle of quarterly results.

Make no mistake, 3D Systems still has some key industry strengths. The company has emerged as a leader in the niche of metal printing (known as selective laser sintering or SLS), which is expected to eventually play a key role in the industrial sector, especially in the provisioning of spare parts. According to Wohlers, metal printing is growing at a 60% annual clip. Indeed it is the industrial sector that may prove to be the sweet spot for this niche, and not the much-hyped consumer niche. PriceWaterhouseCoopers looked at 3-D printing trends among manufacturers and found that “there are signs that the technology is on the cusp of being mainstreamed.” They think supply chains could shift from a focus on spare parts in inventory at key locations to digital designs that are created at local “printer farms.”

Also, keep in mind the razors-and-razor blades aspect of this industry. Industry players are seeding an installed base of 3-D printers now, with hopes of building high amount of recurring revenue streams for materials in future quarters. That’s a key factor I’ll be tracking when Q3 results are announced.

Risks to Consider: As noted earlier, management’s forward revenue guidance is still above Wall Street consensus views, and a lowered bar appears inevitable. Investors may take any downward revision in guidance as a hopeful sign that future results are more achievable, or they may push this stock further out of favor. Fully 32% of the trading float is still held short, representing 13 days’ worth of trading volume. Those figures are as of September 30, though the recent market rout may have led to short covering. Still, there are likely an ample number of shorts that predict lowered guidance will be a negative for the stock.

Action to Take –> 3-D Systems’ management has lost a great deal of credibility with investors, after a much-hyped growth-through-acquisition strategy produced an underwhelming payoff for the bottom line. But industry growth trends still look quite strong, and as long as management can maintain a solid base of technology, 3-D Systems should be able to garner a fair slice of the market share. Against a still-bright long-term outlook, shares now look much more appealing, now that they are washed out.

It’s tough to know if an investor should buy shares ahead of Q3 results slated for late October, in hopes of an upside surprise. Or if it is wiser to wait and fully assess Q3 results (and the forward outlook) before building a position. Either way, this stock should now be on your radar as a timely research opportunity.

Printing metal is truly game-changing and if DDD can prove profitable, then it may be a prime candidate for our premium newsletter Game-Changing Stocks. This newsletter is dedicated to finding the next big trend that could potentially move the markets and change the world. We recently released a report detailing “The Hottest Investment Opportunities For 2015.” For more information about Game-Changing Stocks, click here.