Analysts at Needham & Company announced today that they are “cautiously optimistic” on shares of 3D Systems Corporation following the company’s investor day. Additionally, Needham & Co maintained their “Buy” rating on the stock and a $28 target. The comments and outlook update come after 3D Systems’s very poor performance thus far in 2015, in which the stock has already lost nearly 35%. Shares of 3D Systems currently trade at $21.54 and recently hit a 52 week low of $20.82.
Analyst James Ricchiuti sees possibility of business conditions stabilizing in second half of 2015
James Ricchiuti, an analyst at Needham & Company, highlighted after the investor day event at 3D Systems, “while facing a number of challenges, may be seeing business stabilize and gradually improve in 2H”. Ricchiuti detailed that the company took the opportunity to introduce formally the new CFO, Dave Styka. Additionally, 3D Systems gave analysts a look at products and services that are under development. However, I think one the key takeaways from the investor day conference highlights, according to Ricchiuti, was management’s explanation about the recent slowdown and outlook moving forward. According to management, demand and orders from 3D Systems’s big customers are beginning to pick up and the fact that operating expenses are seen declining through the rest of the year. These two factors should help increase sales, while also decreasing costs and overall helping the company make up for losses at the beginning of 2015.
Barrons’ article, on the other hand, calls for a 30% drop to $15 a share for 3D Systems
Barrons’ published an article back on May 11, 2015, following the company’s horrid first quarter earnings, stating their thesis on why 3D Systems could fall an additional 30% to their target price of $15 a share. At the time of the article, we were seeing a significant shift from sell-side analysts who were collectively downgrading the stock. While it seems the downgrade barrage on 3D Systems may have its worst days behind it, the article brings up another big factor for a reason to be bearish on 3D Systems: Hewlett-Packard Company. HP will be entering the 3D printing industry in 2016 and this represents potentially massive headwinds for 3D Systems on the horizon, due to loss of market share and higher competition.
Overall, 3D Systems has been beaten to a pulp so far in 2015. After weeks and weeks of losses, downgrades and bearishness, analysts are beginning to see a silver lining for a rebound in the second half of 2015. However, further on the horizon, further headwinds lurk and could present a devastating blow to the company.