3D Systems Earnings: An Early Look

Earnings season is now starting to wind down, with most companies already having reported their quarterly results. But there are still some companies left to report, and 3D Systems (NYSE: DDD  ) is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

3-D printing has taken the industrial world by storm, and 3D Systems is on the ground floor of what could be an amazing opportunity. Let's take an early look at what's been happening with 3D Systems over the past quarter and what we're likely to see in its quarterly report next Monday.

Stats on 3D Systems

Analyst EPS Estimate

$0.38

Change From Year-Ago EPS

138%

Revenue Estimate

$103.9 million

Change From Year-Ago Revenue

49%

Earnings Beats in Past 4 Quarters

2

Source: Yahoo! Finance.

Will 3D Systems print out money for shareholders?
Analysts have been cautiously optimistic in their assessment of 3D Systems, keeping their quarterly estimates stable but raising full-year 2013 earnings calls over the past few months by $0.03 per share. The stock has risen by almost 45% since mid-November, although a recent pullback has taken away much more substantial gains.

3-D printing has captured the imagination of innovators, potentially revolutionizing mass production of goods ranging from auto parts to chocolate and cookies. It has also captured investors' attention, with 3D Systems having tripled since its 2011 IPO and with rival Stratasys (NASDAQ: SSYS  ) having doubled just since last April.

Many investors believe that as a result of speculation, 3D Systems and its peers are overvalued. Most of the attention has come from the consumer side of the business, where 3D Systems has an edge because Stratasys doesn't have a consumer 3-D printer offering. Moreover, with potential uses ranging well beyond consumer goods to include educational opportunities, 3D Systems has a head start in a lucrative part of the business. Still, the recent IPO of ExOne (NASDAQ: XONE  ) highlights the various traits of 3-D printers, as ExOne's large-scale printers can produce metal objects that are more than 40 cubic feet in size, dwarfing 3D Systems' 12.6-inch length limit on metal items and leaving Stratasys out in the cold without pure-metal production capacity.

In its quarterly report, watch for 3D Systems to explain its strategy for fending off potential competitors like ExOne, MakerBot, and Shapeways, as the industry begins to get more crowded. Being a first-mover has some value, but 3D Systems can't afford to let competing companies get their feet under them. In addition, a company rebuttal to Citron Research's report calling the company a "bubble stock" could help reassure investors of the stock's promise. Finally, it'll be vital to see whether new printer models are seeing the growth that 3D Systems needs to demonstrate in order to justify its lofty valuation.

Learn more
To get the whole story on 3D Systems, don't miss out on our premium research report on the stock. Inside, you'll learn whether 3D Systems is a buy right now, with ongoing updates as the company's fast-moving development proceeds. You'll also find more on 3D Systems' opportunities, risks, and critical factors for growth. To start reading, simply click here now for instant access.

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Read/Post Comments (6) | Recommend This Article (5)

Comments from our Foolish Readers

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  • Report this Comment On February 21, 2013, at 12:33 PM, DigitalMediaView wrote:

    DDD is down nearly 10% as of this writing not only because their sector is overheated, but because investors have discovered that their earnings growth has been fueled entirely through a flood of small-rival acquisitions, while they had badly neglected R&D spending. Lacking any more obvious take-over targets, their earnings growth is about to hit a wall.

  • Report this Comment On February 21, 2013, at 1:22 PM, Gilseki2U wrote:

    I thought that rumor, originated by short seller Citron Research, had been debunked last Fall.

  • Report this Comment On February 21, 2013, at 1:32 PM, Pete1212 wrote:

    3D is doing a 3 for 2 stock split that applies to people who purchased the stock as of Feb 15. what happens to those who bought the stock between the 15 and the 22?

  • Report this Comment On February 21, 2013, at 3:08 PM, DigitalMediaView wrote:

    Re DDD and earnings all through acquisition, this analysis set the table last month and has been widely read:

    http://seekingalpha.com/article/1115531-3d-systems-a-soberin...

    This second more recent report reaches the following conclusion:

    "I think the cat is out of the bag on the 'revenue growth by acquisition' story and believe that the stock has been in a momentum-fueled bubble over the last year. While I do not suspect fraud, I do expect that this is very near the end of the run for the company's stock. You have a $3.4B company that trades at 8.6x book, 10.38x EV/Revenue, and 43x EV/EBITDA. All with a technical picture that is looking bleaker, and a bunch of shorts that have not been scared out of their positions despite the stock's run."

    http://seekingalpha.com/article/1200581-3d-systems-do-the-sh...

  • Report this Comment On February 21, 2013, at 5:48 PM, derbyt wrote:

    WOW people continue to talk about over valuation yet they dont mention that high flyers like NetFlix and Amazon sport pe's over 200

  • Report this Comment On February 24, 2013, at 12:05 AM, andrewupandabout wrote:

    This quarter is a mood event. 3D printing is just going mainstream so it's too early to tell how the US will handle this. Europe is going nicely by the way.

    Andrew

    3D Printing YouTube Channel:

    https://www.youtube.com/user/andrewupandabout

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