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Why Is 3D Systems (DDD) Up 28.6% Since the Last Earnings Report?
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It has been about a month since the last earnings report for 3D Systems Corporation (DDD - Free Report) . Shares have added about 28.6% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
3D Systems Q1 Earnings Lag Estimates, Guidance Stable
3D Systems' earnings streak came to an end in first-quarter 2017, after three back-to-back quarters of impressive beats. The company reported adjusted earnings (including share-based compensation expense) of $0.02 per share for the quarter, which was way below the Zacks Consensus Estimate of $0.07.
However, non-GAAP earnings came in at $0.06 per share, up 20% from the prior-year quarter figure of $0.05. Modest top-line growth as well as a fall in operating expenses proved conducive to earnings growth.
Inside the Headlines
The 3D printer maker reported revenues of $156.4 million, reflecting a year-over-year increase of 2.5%. Stellar demand for the company’s healthcare solutions, along with steady demand for the software offerings drove the top-line performance. Revenues came in line with the Zacks Consensus Estimate of $156 million.
3D Systems’ Healthcare revenues were up 29% to $43 million year over year, primarily attributable to high demand for printers and materials from medical and dental customers. Also, Materials revenue rose 11% to $43 million, thanks to strong production orders and robust contribution from the previously acquired Vertex-Global. Software revenues totaled $20 million, flat on a year-over-year basis. The company’s Printer revenues were down 4% to $31 million.
In the quarter, gross margin expanded 50 basis points on a year-over-year basis to 51.8%, mainly driven by cost savings accrued from supply-chain betterment initiatives and manufacturing improvements.
In addition, the company’s operating expenses decreased (down 5.3%) to $89.3 million, as SG&A (down 10.3%) expenses fell significantly, stemmed by the company’s successful productivity improvement efforts. However, R&D expense (down 12.8%) was up year over year, mainly on account of a rise in focused investments in production application solutions, including Figure 4 and materials.
Notable Developments
During the reported quarter, 3D Systems rolled out a next-generation additive manufacturing platform, based on the company’s Figure 4 technology and NextDent materials. The company believes that the new platform will bring down cost of operations, reduce fabrication times and produce far less material waste.
Also, the company expanded its MultiJet Wax family by rolling out new models — ProJet MJP 2500W and VisiJet M2 CAST RealWax material — for use in jewelry and industrial casting. Further, it extended its 3D Sprint software across the MultiJet printer family. In addition, 3D Systems introduced four LaserForm metal materials for metal-part production in healthcare, aerospace, dental and other applications.
Also, subsequent to the quarter end, 3D Systems and United Therapeutics joined forces to develop solid-organ scaffolds for human transplants. The multi-year collaboration will integrate 3D Systems’ profound healthcare printing and precision expertise with the regenerative medicine and organ manufacturing capabilities of United Therapeutics Corporation.
Cash Flow and Balance Sheet
3D Systems ended the quarter with cash and cash equivalents of $161.7 million, down significantly from $184.9 million a year back. At the end of Mar 31, 2017, net cash generated from operating activities came in at $19.4 million, marginally up from the year-ago figure of $18.1 million.
Guidance
Concurrent with the first-quarter 2017 earnings release, the company reiterated its guidance for full-year 2017. 3D Systems anticipates revenues in the range of $643–$684 million, which would reflect year-over-year growth of 2–8% in 2017. In addition, GAAP earnings per share, as guided in the previous quarter, are likely to lie in the range of $0.02–$0.06 per share, while non-GAAP earnings are expected to come between $0.51 per share and $0.55 per share.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
At this time, 3D Systems' stock has a great score of 'A' on both growth and momentum front. However, the stock was allocated a grade of 'F' on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for growth and momentum investors.
Outlook
The stock has a Zacks Rank #4 (Sell). We are expecting a below average return from the stock in the next few months.
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Why Is 3D Systems (DDD) Up 28.6% Since the Last Earnings Report?
It has been about a month since the last earnings report for 3D Systems Corporation (DDD - Free Report) . Shares have added about 28.6% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
3D Systems Q1 Earnings Lag Estimates, Guidance Stable
3D Systems' earnings streak came to an end in first-quarter 2017, after three back-to-back quarters of impressive beats. The company reported adjusted earnings (including share-based compensation expense) of $0.02 per share for the quarter, which was way below the Zacks Consensus Estimate of $0.07.
However, non-GAAP earnings came in at $0.06 per share, up 20% from the prior-year quarter figure of $0.05. Modest top-line growth as well as a fall in operating expenses proved conducive to earnings growth.
Inside the Headlines
The 3D printer maker reported revenues of $156.4 million, reflecting a year-over-year increase of 2.5%. Stellar demand for the company’s healthcare solutions, along with steady demand for the software offerings drove the top-line performance. Revenues came in line with the Zacks Consensus Estimate of $156 million.
3D Systems’ Healthcare revenues were up 29% to $43 million year over year, primarily attributable to high demand for printers and materials from medical and dental customers. Also, Materials revenue rose 11% to $43 million, thanks to strong production orders and robust contribution from the previously acquired Vertex-Global. Software revenues totaled $20 million, flat on a year-over-year basis. The company’s Printer revenues were down 4% to $31 million.
In the quarter, gross margin expanded 50 basis points on a year-over-year basis to 51.8%, mainly driven by cost savings accrued from supply-chain betterment initiatives and manufacturing improvements.
In addition, the company’s operating expenses decreased (down 5.3%) to $89.3 million, as SG&A (down 10.3%) expenses fell significantly, stemmed by the company’s successful productivity improvement efforts. However, R&D expense (down 12.8%) was up year over year, mainly on account of a rise in focused investments in production application solutions, including Figure 4 and materials.
Notable Developments
During the reported quarter, 3D Systems rolled out a next-generation additive manufacturing platform, based on the company’s Figure 4 technology and NextDent materials. The company believes that the new platform will bring down cost of operations, reduce fabrication times and produce far less material waste.
Also, the company expanded its MultiJet Wax family by rolling out new models — ProJet MJP 2500W and VisiJet M2 CAST RealWax material — for use in jewelry and industrial casting. Further, it extended its 3D Sprint software across the MultiJet printer family. In addition, 3D Systems introduced four LaserForm metal materials for metal-part production in healthcare, aerospace, dental and other applications.
Also, subsequent to the quarter end, 3D Systems and United Therapeutics joined forces to develop solid-organ scaffolds for human transplants. The multi-year collaboration will integrate 3D Systems’ profound healthcare printing and precision expertise with the regenerative medicine and organ manufacturing capabilities of United Therapeutics Corporation.
Cash Flow and Balance Sheet
3D Systems ended the quarter with cash and cash equivalents of $161.7 million, down significantly from $184.9 million a year back. At the end of Mar 31, 2017, net cash generated from operating activities came in at $19.4 million, marginally up from the year-ago figure of $18.1 million.
Guidance
Concurrent with the first-quarter 2017 earnings release, the company reiterated its guidance for full-year 2017. 3D Systems anticipates revenues in the range of $643–$684 million, which would reflect year-over-year growth of 2–8% in 2017. In addition, GAAP earnings per share, as guided in the previous quarter, are likely to lie in the range of $0.02–$0.06 per share, while non-GAAP earnings are expected to come between $0.51 per share and $0.55 per share.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
3D Systems Corporation Price and Consensus
3D Systems Corporation Price and Consensus | 3D Systems Corporation Quote
VGM Scores
At this time, 3D Systems' stock has a great score of 'A' on both growth and momentum front. However, the stock was allocated a grade of 'F' on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for growth and momentum investors.
Outlook
The stock has a Zacks Rank #4 (Sell). We are expecting a below average return from the stock in the next few months.