Tuesday, Cantor Fitzgerald reiterated an Overweight rating on 3D Systems (NYSE:DDD) with a price target of $5.75. Trading at $4.40, InvestingPro analysis suggests the stock is currently undervalued. The firm’s analyst, Troy Jensen, expects the company to report revenue that aligns with FactSet consensus estimates, indicating a balance between weak system demand and solid consumable sales.
Jensen’s forecast is based on the results of a fourth-quarter survey, which suggested that while the demand for hardware was impacted due to a challenging capital expenditure environment, similar to the third quarter, consumables sales were supported by strong utilization rates at the installed base. This comes as the company’s revenue declined 12.26% over the last twelve months, though the stock has shown remarkable resilience with a 78.14% gain over the past six months.
The analyst’s commentary highlighted the contrasting segments within 3D Systems’ business, where system sales were dampened by external economic factors, yet the demand for consumables remained healthy. This pattern reflects the broader industry trend where companies are cautious with capital spending but continue to require materials for ongoing operations.
Despite the subdued system demand, the robust utilization rates suggest that 3D Systems’ existing customers are actively using their machines, which could be a positive indicator for the company’s service and materials revenue streams.
In conclusion, Cantor Fitzgerald’s stance on 3D Systems remains positive, with expectations for the company’s financial performance to meet market consensus, driven by consumable sales amidst a backdrop of cautious hardware investment.
In other recent news, 3D Systems and Daimler (OTC:MBGAF) Truck | Daimler Buses have entered into a partnership to decentralize spare part production using 3D printing technology. This collaboration is expected to drastically reduce the time to parts in hand by up to 75% and minimize vehicle downtime due to maintenance. The innovative solution includes 3D Systems’ SLS 380 printer and Oqton’s software, along with Wibu-Systems’ digital rights and IP management.
On the financial front, 3D Systems reported a decrease in its third-quarter revenue for 2024, with revenue standing at $112.9 million, a 9% decline from the same period last year. However, the company saw growth in its healthcare segment, particularly in dental and personalized healthcare. Lake Street Capital Markets has maintained a Buy rating for 3D Systems, citing beneficial tailwinds for additive manufacturing.
These developments come as the additive manufacturing market in the automotive sector is expected to grow from $2.9 billion in 2022 to $7.9 billion by 2027. The partnership between 3D Systems and Daimler Buses aligns with the industry’s trajectory and is anticipated to lead to more efficient production and cost reductions for manufacturers.
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