Oppenheimer Is 'Grudgingly Retaining Outperform' On 3D Systems

In a report published Monday, Oppenheimer Equity Research analysts maintained an Outperform rating on

, while reducing the price target from $52 to $38. 3D Systems is currently in a string of earning misses largely due to steady deceleration of its revenue growth trends. "We believe revenue growth is running well below its "normalized" trend given industry dynamics, and there is great potential for it to bottom and recover. As it does so, the potential for leverage and rapid EPS recovery is high," the analysts said. "Valuation is no longer a catalyst, and it will take time to repair the significant (and deserved) reputational damage stemming from recent performance. But we still see the longer term potential as outstripping the risk, justifying our favorable rating," the analysts added. The EPS estimates for 2015, 2016 and 2017 have been reduced from $1.05 to $0.40, from $1.45 to $0.80 and from $1.95 to $1.20, respectively. 3D Systems' growth prospects will be driven by the company's ability to rebuild its tattered image via corrective steps aimed at normalizing revenue growth and thus deliver on the EPS recovery front. 3D Systems has reaffirmed a commitment to less M&A and focus on productivity integration. "3D Systems' story is about leveragable growth," the analysts pointed out.