3D Systems Corporation (NYSE:DDD) is facing many challenges including expiration of its key patents and huge potential competition from new entrants and tech heavyweights. However, Canaccord Genuity analysts Bobby Burleson and Prabhakar Gowrisankaran remain optimistic about the company’s growth prospects. The research firm maintains its Buy rating on the stock with $75 price target.
3D Systems to see solid demand for Phenix metal machines
In a research note dated June 23, Canaccord Genuity said that 3D Systems Corporation (NYSE:DDD) is well-positioned to maintain its 30% organic growth rate. Its growth will be driven by solid demand for Phenix metal machines and the disruptive potential of the fab-grade 3D printer, which the company expects to launch in time for EuroMold. Investors have been concerned that 3D Systems is growing mainly through acquisitions.
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At its June 10 analyst day, 3D Systems Corporation (NYSE:DDD) management said it expected gross margins to improve in the latter half of this year, and accelerate next year. 3D Systems forecasts its revenues to surpass $1 billion in FY2015. Canaccord Genuity estimates the Rock Hill-based company’s gross margins to rise to 55%-60% as its revenues achieve the $750 million-$1 billion run rate.
3D Systems’ FY2014 revenues expects at $715.8 million
For the current quarter, the research firm expects 3D Systems Corporation (NYSE:DDD) to report $166.5 million in revenues with $0.18 in non-GAAP earnings. For the full year, Canaccord Genuity analysts forecast $715.8 million in revenues and $0.81 per share in earnings. 3D Systems stock surged 7.29% yesterday to close at $57.23. The big boost came after Jefferies painted a positive picture of the 3D printing industry.
Jefferies said Friday that industrial 3D printing has strong growth prospects. It identified Stratasys, Ltd. (NASDAQ:SSYS) as the best-positioned company to benefit from the industrial prototyping boom. 3D Systems Corporation (NYSE:DDD) enjoys dual exposure as it operates in industrial as well as consumer 3D printing market. Therefore, it could prove to be a difference-maker as the 3D printing industry saturates.
3D Systems Corporation (NYSE:DDD) shares were down 0.49% to $56.95 in pre-market trading Tuesday.