Emerging Technology

3D Printing Investing

Shares of 3D Systems have increased more than 30 percent since releasing its Q4 and full year 2017 earnings on February 28.

While 3D Systems (NYSE:DDD) released its preliminary Q4 2017 earnings nearly a week ago (February 28), its share price has continued rallying in the days following the announcement.

And, rightfully so: according to the announcement, the company’s revenue for Q4 is estimated to be between $176 and $178 million–roughly a seven percent increase from $165.9 million compared to the same quarter in 2016–while full year revenue is estimated to be in $645 million to $647 million, compared to $633 million in 2016.

Since March 1, shares of 3D Systems have increased 32.42 percent to close at $12.58 on Monday (March 5). After-hours trading bumped its share price up slightly more, by 0.10 percent to $12.59.

Contributing to its growth in 2017, Vyomesh Joshi, CEO of 3D systems, said industries like healthcare was a major culprit to its increase in revenue.

Case in point, a report called “North America Healthcare 3D Printing Market – Size, Outlook, Trends, and Forecasts (2018-2024),” estimates that the 3D printing market size will reach roughly $4.79 billion by the end of 2024, growing at a compound annual growth rate (CAGR) of 20.90 percent between now and then.

In short, this should no doubt put 3D Systems in a good position to be a leader in the 3D printing healthcare market moving forward. The company teams up with surgeons, healthcare professionals, medical device manufacturers and medical teaching staff to provide insight into healthcare solutions, such as virtual reality simulators, 3D printed anatomical models, virtual surgical planning, patient-specific surgical guides, instrumentation and implants.

“While we still have work to do, we made significant progress in 2017 to stabilize and turn around the company,” Joshi added.

Despite positive preliminary financial results and a rising share price, Tipranks.com notes that one analyst in particular has reiterated his sell rating on the company in the last five days.

Christopher Van Horn from B.Riley FBR said in a note that 3D Systems had delayed its Q4 2017 earnings results by more than two weeks, although the earnings “exceeded” his estimates and consensus.

Van Horn added:

Following better-than-expected 4Q17 results from Stratasys (SSYS), a close peer, on February 28, before market open, we are not overly surprised to see DDD beat consensus. The company withdrew its FY17 guidance when it released 3Q17 results, giving investors few goalposts for the 4Q17 earnings report. SSYS also guided earnings well below Street expectations on higher OpEx and slightly lower sales, which we think is a direct negative read through to DDD shares.

As it currently stands, analyst consensus at Tip Ranks shows based on 3 analyst ratings, 3D Systems is currently ranked as a moderate sell, with one analyst recommending to hold, while two recommend to sell. 3D Systems’ average price target is ranked at $10.25, with a high estimate of $11 and a low estimate of $9.50 over the next 12 months.

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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.


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