3D Systems Corporation (DDD)’s Investor Day Was Uneventful

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3D Systems Corporation (DDD)’s Investor Day Was Uneventful
Image Credit: 3D Systems Corporation

3D Systems Corporation (NYSE:DDD) held its investor day on Monday, and the company raised its guidance. However, analysts generally see the company’s announcements as being neutral to a slight positive. Shares of the 3D printing company slumped on Tuesday and early this morning, declining by nearly 2% yesterday and then falling by an additional 1% in premarket trading this morning.

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3D Systems raises guidance

In a report dated June 10, 2014, JPMorgan analyst Paul Coster said he believes 3D Systems Corporation (NYSE:DDD) raised its guidance mostly to reflect its acquisition or Robotec. The company’s new guidance for the full year is between $695 million and $735 million. That’s compared to its previous guidance of between $680 million and $720 million. He notes that the company did not increase its earnings per share guidance of between 73 cents and 85 cents per share and said that this reflects the company’s continued investments.

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The analyst believes 3D Systems Corporation (NYSE:DDD)’s revenue and earnings will be loaded into the back end of this year because of the timing of the company’s new products. He noted that in the company’s presentation material for the investor day, it emphasized “points of differentiation” within the 3D printing industry. The three main areas are medical, metals and manufacturing, and 3D Systems takes a holistic approach.

Coster team sees 3D Systems Corporation (NYSE:DDD)’s investor day as a mild positive for the company and continues to rate it as Neutral.

Goldman Sachs remains upbeat on 3D Systems’ long-term potential

In a report dated June 9, 2014, dated June 10, 2014, Goldman Sachs analysts Samuel Eisner, Nick Stuart and Stephanie Xu also noted that 3D Systems Corporation (NYSE:DDD) raised guidance because of the Robetec acquisition. Unlike the JPMorgan team, however, they point out that the company left its earnings per share guidance the same in spite of its recent equity raise, which resulted in 6% dilution. They believe this means that there’s “solid underlying profitability” here.

The analysts think 3D Systems Corporation (NYSE:DDD) will continue to look for transactions within the consumables industry, either because it wants to acquire new materials or because it is aiming for vertical integration.

Hybrid manufacturing is important for 3D Systems

The Goldman Sachs team thinks that combining additive and traditional manufacturing could fill a market niche, noting that 3D Systems Corporation (NYSE:DDD) highlighted its continuous high speed fab grade printing through its modular smartphone, Project Ara. They believe this means that the print platform in the manufacturing process will have to move to “different printer heads.” Based on the company’s provided estimates, they think it will be able to raise jetting speeds by up to 50 times and also integrate with traditional manufacturing processes, which they believe is a key differentiator for 3D Systems.

They also note that it looks like 3D Systems Corporation (NYSE:DDD) is well-positioned in the medical modeling business since it acquired Virtual Surgical planning. They say 3D Systems will be able to “enable more personalized surgery and help aid in better treatment for patients.”

They continue to rate 3D Systems Corporation (NYSE:DDD) as Neutral with a $55 per share price target.

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Michelle Jones is editor-in-chief for ValueWalk.com and has been with the site since 2012. Previously, she 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. Email her at Mjones@valuewalk.com.
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