3D Systems Corporation (DDD): Bearish View Grows Ahead of Earnings

3D Systems Corporation (DDD): Bearish View Grows Ahead of Earnings

3D Systems Corporation (NYSE:DDD) will be reporting its fiscal fourth quarter and full year results 9:00 am EST on Friday, February 28. The 3-dimensional printing company’s stock has been highly volatile in February, with a high of $80.60 and a low of $54.63 as investors continued to digest 3D Systems’ guidance and its acquisition spree.

3D Systems has already set low expectations

On February 5, 3D Systems Corporation (NYSE:DDD) lowered its FY2013 EPS guidance from $0.93-$1.03 range to $0.83-$0.87. For the full year, the company said it expects revenues in the range of $513-$514 million. 3D Systems had previously issued the revenue guidance of $500-$530 million. The Rock Hill-based company forecasts its Q4 revenues to jump at least 50% YoY. Wall Street anticipates 24 cents in Q4 earnings. However, the brokerage community is even more bearish, expecting just 21 cents in earnings.

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According to Joseph Hargett of Investor Place, the 12-month consensus price target for 3D Systems Corporation (NYSE:DDD) stands at $79. That’s just a 3.4% premium to the stock’s closing price yesterday. According to Thomson Reuters, 16 of 20 research firms have a Buy rating on the stock, three have a Hold rating, and only one has a Sell rating. However, the analyst opinions seem to be changing rapidly. On February 24, Bank of America Merrill Lynch downgraded the stock from Buy to Underperform. One or two more downgrades would create a big trouble for the stock.

Wall Street pessimistic about 3D Systems’ earnings

Wall Street has grown increasingly bearish about 3D Systems Corporation (NYSE:DDD). Short interest in the stock has gained 8% during the latest quarter. Today, 17.4% of its total float or 16.6 million shares are sold short. Looking at the options activity, Puts have become the choice of traders. Now there are over 16,000 open put contracts in February/March series of options. On the other hand, there are only 12,000 open call contracts. So, the put/call open interest ratio for February/March stands at 1.59, a sharp increase from 1.03 on February 11.

3D Systems

Options traders usually have a bullish view ahead of the key events like earnings reports. But their bias is highly skewed towards put options, indicating a high degree of pessimism.

3D Systems Corporation (NYSE:DDD) shares plunged 2.52% to $73.94 at 9:40 AM on Tuesday.

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