3D Systems Corporation (NYSE:DDD)’s earnings results were about what analysts were expecting, but they weren’t high enough to please investors. JPMorgan analysts actually reduced their price target for the 3D printing company after the report, although they maintained their Neutral rating on the stock, saying it looks fully valued and still deserves the premium multiple investors have assigned it.

3D Systems Corporation DDD Logo

3D Systems looks solid

In this week’s report, 3D Systems Corporation (NYSE:DDD) posted earnings per share which were in line with consensus at 15 cents per share on revenue of $147.8 million, which was slightly ahead of estimates. In a report dated April 29, 2014, JPMorgan analysts Paul Coster, Mark Strouse and Paul Chung said the upside compared to their venue model came from the company’s Printer / Other revenue, which was $60.8 million, compared to their estimate of $52.9 million. The upside was enough to offset the miss on the company’s Services revenue, which came in at $46.6 million, compared to their estimate of $51.4 million.

3D Systems Corporation (NYSE:DDD) reported Materials revenue of $40.4 million, which was a bit higher than they were expecting, which was $38.9 million. The company’s gross margins were 51.1%, a bit lower than their expectations of 51.3% because of product mix in the Printer segment. The JPMorgan team says Printer margins missed quite a bit, coming in at 39.8%, compared to their estimate of 43.5%.

3D Systems prolongs investment phase

The analysts note that 3D Systems Corporation (NYSE:DDD) said it expects operating leverage to resume in the second half of this year and then be completely restored the following year. They say this is a longer investment phase than the company’s previous comments of expecting operating leverage in 2015.

3D Systems Corporation (NYSE:DDD) also targets $1 billion in revenue in 2015, which would be a 43% year over year increase from the midpoint of this year’s guidance of between $680 million and $720 million. The JPMorgan team sees the 3D printer company’s 2015 revenue target as being “somewhat attainable,” especially if the company continues to acquire other companies. However, they’re still cautious about how much leverage 3D Systems will be able to realize from its business model.

3D Systems price target cut

They trimmed their 2015 earnings per share estimates for 3D Systems Corporation (NYSE:DDD) to reflect the longer investment phase, bringing the number to $1.24 per share. They reduced their December 2014 price target from $54 to $43.50 per share.