What The Street Is Saying About 3D Systems

3D Systems Corporation DDD released a disappointing preliminary earnings report for its first quarter on Friday and indicated the potential for more uncertainty ahead.

The stock tumbled approximately 10 percent Friday following the news. On Monday, the stock traded at $26.30, down 3.42 percent.

Wall Street analysts weighed in on the company following the announcement. Below are highlights along with current ratings and price targets.

Deutsche Bank - Sell, $20 price target

“We think 3D printing is a disruptive technology, which means its starts in “non-consumption” markets (things that couldn’t be printed before) and eventually works its way into the mainstream. Recent earnings reports reflect and immature industry in terms of product reliability, customer readiness, and distribution. We do believe 3D printing us a “thing” longer term. However, it is not clear who the winners will be - early market players like 2D Systems or goliaths like HP, which enters the business in 2016.”

Brean Capital - Hold, no price target

“We note that DDD commented that Organic revenue actually declined during the Q. This is particularly disappointing as organic revenue waned considerably in ’14 (13% vs. ’13 of 29%) and this year was looked at as a year to build back into the 20% range. Encouragingly, DDD noted that the first few weeks of the April Q they have seen order activity stronger than they had seen to begin the Mar Q, which had been off to a good start.”

Credit Suisse - Neutral, $40 price target

“The topline disappointment was limited to industrial printers in the quarter while consumer products, software, and services all saw strength. Driven by the macro environment, large industrial customers (particularly automotive, aerospace, and healthcare end markets) reduced investments in Q1. However, management is confident that demand will return to meet its full year expectations as orders expected in Q1 have been shifted to Q2 with the first couple of weeks in the quarter seeing higher orders than the same time period in Q1.”

Oppenheimer - Outperform, $38 price target

“At lower estimates the multiple is not the catalyst it once was, and management credibility is shot. Yet, conditions for leverage are being established, and while sales growth is hugely disappointing, it is likely unsustainably low amid industry trends. In effect, while the original thesis was undermined by sales growth, a new ‘trough EPS’ thesis is now in place. If, in fact, 1H15 represents a trough in sales/EPS growth, shares will likely be able to regain their footing.”

Piper Jaffray - Underweight, $21 price target

“After the poor Q1 results, we believe the company will have to materially cut full year guidance and believe the magnitude of this cut is not fully reflected in the current stock price. We believe 3D Systems’ issues are bigger than the company is communicating and anticipate pending competition will prevent the company from rebounding from this depressed competitive state. As a result of our concerns for DDD’s recovery, we are lowering our rating from Neutral to Underweight and cutting our price target to $21 from $32.”

Canaccord - Hold, $27 price target

“The disappointing results were attributed to a number of impactful economic factors including FX fluctuations resulting in declines for the euro and yen relative to the dollar and lower oil prices. The economic factors caused customers in the aerospace, automotive and health care industries to halt new printer purchases and lower materials and services demand. Additionally, DDD suffered from performance issues related to metal and nylon applications which delayed sales of additional printers during the first quarter.”

Stephens - Equal-weight, $27 price target

“On the bright side, expectations are for GPMs in 1Q15 to expand 110 bps q/q to 49.0% and for unit sales to be strong in consumer printers (up ~169% y/y) and metal printers (up ~46% y/y). Some of this GM improvement is attributable to increased software as a percent of consolidate revenue. Net net, the Co. pre-released non-GAAP EPS to be in the range of $0.02 - $0.03 vs. us/ the Street at $0.17.”

Jefferies - Hold, $30 price target

“We were more pessimistic about Q1 revenues and opex than consensus expectations but both were worse than we anticipated. DDD would not affirm previous 2015 guidance. Our checks indicate continued issues in the U.S. reseller channel and that DDD's metal issues will likely continue. We remain concerned about the extent of the H2 ramp and see new entrants pressuring long-term gross margins.”