3D Systems Corporation (NYSE:DDD) is poised to stay stable over the long-term, according to RBC Capital Markets analysts (Amit Daryanani, Mitch Steves and Karl Ackerman) in the wake of organic growth. The analysts are bullish on the company, which is positioned to grow on the back of faster new technology acquisitions. The report published on June 11th argues that the recent merger and acquisition deals will drive revenue expectations upward for financial year 2014 and firmly position the company to achieve financial year 2015 revenue targets.
Guidance raised by 3D Systems
Owing to the recent deal, the company has revised its financial year 2014 revenue guidance to $695-735 million from previous guidance of $680–720 million. Earnings per share is maintained at the same level between $0.73 to 0.85 as the contributions from the deal will be negated by the recent capital raise.
The report suggests the effects of the recent deals will be clear by the second quarter, and also the mid-point guidance is a bit conservative as it has not taken fully the new product launches that could add to the growth of the company in the current fiscal year. 3D Systems Corporation (NYSE:DDD) is looking forward to posting sales of $1 billion in the fiscal year 2015 on 30% organic growth. Analysts have not included Robtec and Medical Modeling in their estimates.
Targeting organic growth
3D Systems Corporation (NYSE:DDD) will continue to expand in the field of medical, dental and aerospace and consumer markets by leveraging its entire product portfolio. 3D Systems has already proved its mettle in these markets, and is also enhancing print capabilities along with offering more services and software. Analysts are expecting incremental operating leverage by 2015 with the growth of these businesses.
Google’s Project ARA will be beneficial to the company as 3D Systems Corporation (NYSE:DDD) is targeting $1 billion revenue in from the company. Although the target is not that high, analysts expect it to increase in the future. The development of a continuous fab-grade printer will also present new opportunities within jewelry, aerospace, medical, and electronics markets given significant improvements in print speed (50xfaster than current jetting technology) and material properties.
The analysts note that deal synergies and new product launches “should enable incremental operating leverage in 2015.” They maintained their Outperform rating on 3D Systems Corporation (NYSE:DDD), but lowered the price target to $64 from $78.