3D Systems Corporation (DDD): Sell Side Split On High Valuation

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Valentine’s Day is right around the corner. Will you be using a 3D printer to make your Valentine?

3D Systems Corporation (NYSE:DDD) has the ability to print romantic cards, as well as prosthetic limbs, through the technology accumulated from their acquisitions. However, the company’s acquisition rampage has analysts talking about 3D Systems Corporation (NYSE:DDD)’s place in the 3D printing market. Some analysts believe that the company’s growth will continue to be stable due to the growing demand for 3D printing technology, while other analysts are concerned about DDD’s margins as the company spends more on product development and marketing. See why the analysts are in a 3D debate about whether to BUY or SELL DDD.

DDD Troy and Brian 3D Systems Corporation DDD

3D Systems Corporation DDD

While the company did just announce that it had to cut its Q4 profit outlook due to a period of heavy investments, Piper Jaffray’s Troy Jensen reiterated his BUY 3D Systems Corporation (NYSE:DDD) recommendation and raised his price target to $69 from $61. Troy not only raised his revenue estimates for this year, but he also raised them for next year. He believes that “strengthening demand implied by the 2014 outlook is a positive for the company.” Troy is ranked 115 out of 2386 analysts and has a 5.1% average return over S&P-500.

On the other hand, William Blair analyst Brian Drab could not look past the earnings shortfall, maintaining his SELL rating. 3D Systems Corporation (NYSE:DDD) stated that it believes its full year revenue will be in the range of $513 million to $514 million, down from the previous estimate of $500 million to $530 million. Brian noted that the “earnings shortfall was attributed to gross margin contraction, as well as a substantial increase in R&D expenditure related to accelerated new product developments, a step up in sales and marketing expenses related to rapid products channel expansion, and higher costs related to acquisition concentration during the quarter.”

Brian also pointed out that this is “the second downward revision of 2013 earnings guidance,” and the company currently has a “lofty valuation in the face of an earnings decline”. Brian is ranked 2119 out of 2386 analysts and has a -5.6% average return over S&p-500.

Please note: Both Troy and Brian have a history of recommending DDD, including a +29.1% over S&P-500 for Troy and at loss of -39.0% over S&P-500 for Brian due to their DDD recommendations.

3D printing might be the greatest thing since sliced bread, but these analysts are weighing in on the importance and position of 3D Systems within the 3D printing sector. Is buying up too much technology a bad thing? Or will the market continue to demand Valentine’s, prototypes, and airplanes from DDD? To follow these analyst recommendations about DDD, as well as recommendations about other companies, download TipRanks, and start making informed financial decisions for your portfolio.

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