3D Systems Faces Falling Expectations As Earnings Loom

Shares of 3D Systems Corporation DDD are falling on Tuesday afternoon as the company prepares to report its first quarter financial results on Wednesday, before the market opens.

According to Estimize, there is a large divergence between experts’ and the crowd’s expectations. While they both anticipate year-over-year declines in earnings, the crowd projects earnings of $0.12 per share on revenue of $172.84 million, while the Street models consensus earnings of $0.05 per share on revenue of $159.28 million. This compares with earnings of $0.15 per share (on revenue of $147.8 million) reported in the first quarter of 2014.

The graph below shows how 3D Systems’ actual earnings have compared to consensus estimates over the past couple of years.

As it can be appreciated, the company has a history of missing estimates, which suggests this quarter could see a miss too.

A second chart illustrates the evolution of consensus estimates over time. As evidenced above, sentiment has become increasingly bearish, both amongst the crowd and experts, as the earnings date loomed.

Street Talk

A few days ago, 3D Systems released a disappointing preliminary earnings report, and analysts weighed in since.Deutsche Bank rated the stock a Sell and gave it a $20 price target, arguing: “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.”

Related Link: What The Street Is Saying About 3D Systems

Other firms have also rated the stock:

-       Brean Capital gave it a Hold

-       Credit Suisse gave it a Neutral and $40 price target

-       Oppenheimer rated it Outperform, with a $38 price target

-       Piper Jaffray says the stock is an Underweight, and gives it a $21 price target