Proto Labs (PRLB) saw its stock price plummet 5.34% in Tuesday's pre-market trading session, despite reporting record revenue for the third quarter of 2025. The digital manufacturing company announced Q3 revenue of $135.4 million and diluted earnings per share of $0.30, marking a strong performance particularly in CNC machining and sheet metal services.

However, investors seem to be focusing on longer-term concerns rather than the immediate positive results. The company's guidance for fourth-quarter revenue between $125.0 million and $133.0 million has raised eyebrows, suggesting a potential slowdown in growth. Moreover, ongoing worries about declining profit margins, persistent cost pressures, and competitive pricing have become central to the investment narrative surrounding Proto Labs.

While Proto Labs has made efforts to strengthen its position in high-growth sectors like aerospace and industrial machinery with the launch of advanced CNC machining capabilities in October 2025, it remains uncertain whether these initiatives can offset the softness in legacy services and margin headwinds. The market's reaction suggests that investors are recalibrating their expectations for Proto Labs' long-term profitability and growth prospects, despite the company's strong operational performance in the most recent quarter.