Shares of 3D Systems Corporation (DDD) traded down as much as 11% in Friday afternoon after the company posted 2Q’14 results that missed analysts’ earnings and revenue estimates by 12.5% and 7.13%, respectively. Following the disappointing results, three separate equity firms downgraded the stock. Analysts at RBC Capital Market downgraded DDD to ‘Sector Perform’ from’Outperform’, lowering their price target to $54 from $64. Piper Jaffray issued a ‘Neutral’ rating from an ‘Overweight’ rating downgrade, lowering their price target by 13 points to $50/share. The stock was also downgraded to ‘Neutral’ from ‘Buy’ at Citigroup (C).
However, S&P Capital’s Angelo Zino ended the week on a more optimistic note. In a report to clients on Friday, the analyst reiterated a ‘Strong Buy’ recommendation on the stock, although he cut his PT by 10 points to $60/share and lowered his full year operating earnings estimate.
Nonetheless, he argues that the $5.27 billion 3D printing company still deserves to trade at a premium multiple, given its leading market share position.
From Zino’s note [via Barron’s Teresa Rivas]: “While product delays and timing issues lead to recent subpar organic growth and margin pressures, we see improving trends for both metrics in the second half. We keep our positive view on 3D printer adoption and see growth being led by the higher-margin materials business. We think investor sentiment is overly pessimistic.”
3D Systems has a trailing PE of 112.78 and a forward PE of 42.04. Price/Sales for the t-12 period is at 9.34 while EPS is at $0.43.
Shares of 3D, which are down 48.42% year-to-date, posted a weekly loss of 9% closing at $47.93 on Friday.
3D Systems Corporation is a provider of 3D printing centric design-to-manufacturing solutions in the United States, Germany, the Asia-Pacific, and other European countries. The company was founded in 1986 and is headquartered in Rock Hill, South Carolina.
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