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Why 3D Systems Stock Just Rocketed 24.5%

By Rich Smith - May 11, 2021 at 12:02PM

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3D crushed on first-quarter earnings -- and looks likely to keep on beating predictions.

What happened

Shares of 3D Systems (DDD 5.00%) stock are rocking 24.5% higher as of 11:15 a.m. EDT Tuesday, one day after the 3D printing machine maker reported blockbuster earnings for its fiscal first quarter of 2021.

Analysts had forecast that 3D would earn only $0.02 per share (pro forma) on sales of $136.6 million in the quarter. Instead, 3D reported $0.17 per share pro forma, and on sales of $146.1 million, beating on both the top and bottom lines.  

Rising red stock arrow representing a stock going up drawn on a yellow background

Image source: Getty Images.

So what

And this news only gets better. 3D Systems sales, according to generally accepted accounting principles (GAAP) grew 7.7% year over year, but if you exclude sales from businesses divested in 3D's restructuring, to focus on its core strengths, those core businesses grew revenue 16.6% -- twice as fast as the headline revenue growth.  

Best of all? When calculated according GAAP, instead of pro forma, 3D Systems recorded net income of $0.36 per share for the quarter, twice its headline profit.

Now what

Management did not provide specific guidance on what investors should expect in Q2, or for the year. However, commenting on the results, 3D CEO Jeffrey Graves boasted that 3D's "combination of strong top line growth, profitability, and cash generation distinguishes us in our industry," and predicted that as time goes on, the company will approach its goal of "sustained double-digit revenue growth, 50% gross profit margins and 20% adjusted-EBITDA margins."

As for Wall Street's analysts, they're still predicting less than $579 million in sales, and only $0.21 per share in pro forma profits this year. Seeing as 3D just delivered 81% of those expected profits in just Q1 alone, though, I think it's a safe bet that 3D will beat those predictions.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends 3D Systems. The Motley Fool has a disclosure policy.

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