3D Systems Corporation (NYSE:DDD) stock tumbled 2.13% to $49.07 in early trading Friday after the company reported disappointing Q2 results on Thursday. The stock has declined 46% year-to-date. 3D Systems earned 16 cents a share on revenue of $151.50 million. Analysts on average expected 3D Systems to earn 18 cents per share with $162.30 million in revenue.

3D Systems

3D Systems stock has become a ‘show me’ story

The 3D printing company’s gross margins fell 330 basis points QoQ to 47.8%, mainly due to a large number of new product launches. Operating margins shrank 290 basis points to 15.8% as 3D Systems continues to spend heavily on growth initiatives. Anyway, the company management raised the full-year revenue guidance by $5 million to $700-$740 million range from the previous $695-$735 million.

The increased revenue guidance was widely expected. It reflects recent acquisitions such as Robtec and Simbionix. However, 3D Systems left the EPS guidance unchanged at $0.73-$0.85 per share. Deutsche Bank analysts Sherri Scribner and Joakim Mahlberg said in a research note that they expected sales growth to accelerate in the second-half of this year as 3D Systems launches new products. Analysts said 3D Systems has become a “show me” story. The company has to deliver on 2H2014 growth expectations. Deutsche Bank has a Buy rating on the stock with $80 price target.

3D Systems needs to deliver 45% growth in the second-half of this year

3D Systems built a strong backlog of $31.9 million during the second-quarter, a QoQ growth of 22%. Deutsche Bank says new product launches should drive strong sales and improve profitability. Some of the growth and profitability will come from acquisitions like Robtec and Simbionix that are yet to be closed. But the company still has an uphill task ahead. To get to the midpoint of its full-year revenue guidance, 3D Systems needs to deliver a whopping 45% YoY growth in 2H2014. The company’s revenues increased 25.4% during the latest quarter.

Deutsche Bank has lowered it full-year earnings forecast from $0.62 per share to $0.56, though it maintains the revenue forecast of $710 million.