3D Systems Corporation (DDD) Fundamentals Strong

3D SystemsImage Credit: 3D Systems Corporation

Sentiment on 3D Systems Corporation (NYSE:DDD) could be shifting toward the positive end of the spectrum, according to UBS analysts. They have increased their price target on the 3D printing company, although they remain Neutral-rated on it. A glance at reports from multiple firms reveals very mixed sentiment on 3D Systems.

UBS raises price target

In a report dated June 11, 2014, UBS analysts Steven Milunovich and Peter Christiansen raised their price target for 3D Systems Corporation (NYSE:DDD) from $47 to $51 per share. They also increased their estimates and slightly increased their target multiple. They believe the stock has stabilized in the wake of its 45% decline, which they say suggests that sentiment has finally hit bottom.

The UBS team notes that 3D Systems Corporation (NYSE:DDD) said it has made progress in medical, Project Ara and metal printing. They see an opportunity for growth in pre-surgical planning, an area in which they think the company is uniquely positioned. They also believe the company’s capabilities in metal printing is a “strategic asset in developing use case growth in the vertical.”

3D Systems updates merger and acquisition strategy

3D Systems Corporation (NYSE:DDD) has been busily gobbling up other 3D printing companies. While some were hoping for news of another acquisition, the company emphasized its “3Ms of 3D printing,” which they say are medical, materials and metals. The UBS team likes how the company is focused on areas in which the market is most quickly developing. The analysts think this will make recent capital raises “less dilutive.”

3D Systems looks more sustainable

In a report dated June 10, 2014, Canaccord Genuity analysts Bobby Burleson and Prabhakar Gowrisankaran said Tuesday’s analyst day was mostly positive. They said they are now “more convinced” that 3D Systems Corporation (NYSE:DDD)’s organic revenue growth is sustainable. They’re also more convinced that demand for metal machines remains strong and that the company’s fab-grade continuous 3D printings are truly disruptive for the manufacturing market.

They note that 3D Systems Corporation (NYSE:DDD)’s management provided strong guidance, increasing revenue guidance to reflect recent acquisitions. They also point out that management left their earnings per share guidance of between 73 cents and 75 cents per share in spite of the recent 6% dilution from the secondary capital raise.

In addition, the Canaccord Genuity team says 3D Systems Corporation (NYSE:DDD)’s fundamentals are still strong even though its stock has declined so much from its highs. With such a dramatic decline in stock price, they said it would be expected that the company’s fundamentals are deteriorating meaningfully. However, they expect that the company’s organic growth will pick up by at least 30% through 2015. They have reiterated their Outperform rating and $75 per share price target.

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About the Author

Michelle Jones
Michelle Jones was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Michelle has been with ValueWalk since 2012 and is now our editor-in-chief. Email her at Mjones@valuewalk.com.

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