3D Systems Corporation (DDD) Buy or Sell Stock Guide
The analysis below may be helpful to you if you have any of the following questions about DDD stock:
- Is DDD a buy or a sell?
- Should I sell or hold DDD stock today?
- Is DDD a good buy / a good investment?
- What are DDD analyst opinions, recommendations, ratings?
Here are DDD stock buy reasons/signals:
1. 3-D printing remains in an early stage of development. Leading consultants forecast long-term annual revenue growth rates of 20% or more.
2. 3D Systems possesses the industry’s broadest range of technologies and services, from design software through direct manufacturing and post-printing technical support. This positions it as a go-to supplier for many customers with diverse or evolving needs.
3. The Wilsonville, Oregon, R&D center acquired from Xerox is spearheading new product development efforts, including the firm's fastest-ever printers incorporating its new "racetrack" design.
4. 3D Systems business follows an annuity based business model, which combines materials, services and software, to boost structural improvements and ensure profitable growth. It is focusing on strategic initiatives like improvement of existing 3D printers, strengthening partnerships and enhancing productivity to drive growth. Changes are also being implemented in the sales network to make it more productive, responsive and scalable; while lean manufacturing initiatives are being undertaken in supply-chain operations to maximize efficiency.
5. With the 3D printing industry booming, the company’s focus on this market presents a favorable long-term opportunity. As a matter of fact, majority of 3D Systems customers are shifting from prototyping to end use production, using 3D printing technology and the company believes that it is well positioned to aid them in their transformation. Moving ahead, 3D Systems believes that robust demand for production printers, materials and software will continue to act as major catalysts, supplementing growth.
6. Currently, 3D Systems is witnessing robust prospects across most of its end business. Especially, the company remains bullish on the prospects of its healthcare business. For full-year 2016, healthcare business charted a growth trajectory on the back of higher healthcare services and simulation revenues.
7. 3D technology has the potential to revolutionize manufacturing and improve the commercial space. Various companies, ranging from hospital managers to car manufacturers, are now opting for varied 3D solutions to address simple make-to-stock orders as well as complex, engineer-to-order production strategies. Consequently, the company has been expanding its operation processes to meet increasing demand across diverse sectors.
8. DDD quarterly revenue growth was 6.80%, higher than the industry and sector average revenue growth (5.88% and 5.77%, respectively).
Here are DDD stock sell reasons/signals:
1. Expiration of early patents on the firm's SLS technology could spur a round of new entrants, downward pricing pressure, and perhaps even open-source alternatives in one of its core product lines.
2. Relative to some competitors, 3D Systems remains underexposed to faster-growing products such as metal printers and overexposed to highly competitive, low-end personal and professional segments that lack an economic moat.
3. The steep drop in the share price from its January 2014 high will complicate execution of the firm's strategic growth programs.
4. Macroeconomic factors such as economic slowdown, inflation, currency fluctuations, commodity prices and credit availability negatively impact the company’s performance. In the last reported quarter, revenues from 3D printing products and services were almost flat year over year. In full- year 2017, total printer revenues plunged 7%. If these problems persist, 3D Systems’ earnings will likely continue to be pressured, going forward.
5. 3D Systems operates in a highly competitive industry with its chief competitors being the firms that manufacture or use machines to make models, prototypes, molds and small-volume to medium-volume manufacturing parts. These industry players include suppliers of CNC, dealers of plastics molding equipment, including injection-molding equipment, suppliers of traditional machining, milling and grinding equipment, and businesses that use such equipment to produce models, prototypes and molds. Some of the company’s existing and potential competitors are researching, designing, developing and marketing other types of competitive equipment and software, print materials and services.
6. 3D Systems operates in a highly dynamic industry. The company’s business faces the adverse effects of rapid technological changes, alterations in user and customer requirements and preferences, new product and service introductions requiring new technologies, and the emergence of new standards and practices. The company has to constantly come up with new products, services and technologies that address the increasingly sophisticated and needs of prospective customers, particularly in the area of printer speeds and print materials functionality.
7. DDD profitability is declining. The YoY profit margin change was -4.18pp.
8. DDD forward P/E ratio is 54.13, and it’s high compared to its industry peers’ P/E ratios.
9. DDD PEG ratio (P/E adjusted for growth) is 20.37, and it’s high compared to its industry peers’ PEG ratios.
10. DDD average analyst price target ($10.11) is below its current price ($14.09).
11. DDD short share of float is 33.41%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock.
12. DDD short interest (days to cover the shorts) ratio is 9.56. The stock garners more short interest than the average industry, sector or S&P 500 stock.
What are your thoughts on DDD?
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