3D Systems (DDD) Up 27.9% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for 3D Systems (DDD). Shares have added about 27.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is 3D Systems 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 Q3 Earnings Beat Estimates, Revenues Miss
3D Systems reported third-quarter 2023 non-GAAP earnings of 1 cent per share, comfortably beating the Zacks Consensus Estimate of a loss of 6 cents. The company had reported a loss of 5 cents per share in the year-ago quarter.
The company reported revenues of $123.8 million, which declined 6.4% year over year and lagged the consensus mark by 0.07%.
In the third quarter, Product revenues represented 42.4% of total revenues and decreased 18.3% to $80.4 million. The figure lagged the Zacks Consensus Estimate by 2.05%.
Services revenues, which accounted for the remaining 35% of revenues, jumped 20.8% year over year to $43.4 million. The figure beat the consensus mark by 4.27%.
Quarter Details
In the third quarter, on the basis of market type, Healthcare revenues fell 18.3% year over year to $52.4 million. On a constant-currency basis, the segment’s revenues plunged 19.5% year over year, mainly due to continued softness across the dental orthodontic market.
The Industrial Division’s revenues increased 4.9% year over year to $71.4 million. On a constant-currency basis, the segment’s revenues increased 1.8%.
3D Systems’ non-GAAP gross profit increased 5% year over year to $55.5 million. The non-GAAP gross profit margin expanded 490 basis points to 44.8%, primarily driven by improved operational efficiencies and a favorable mix.
Adjusted EBITDA was $4.7 million against negative adjusted EBITDA of $0.3 million, benefiting from improved operational efficiencies, favorable mix and lower incentive compensation expense.
Balance Sheet
As of Sep 30, 2023, cash, cash equivalents and short-term investments were $445.6 million, lower than $491.6 million as of Jun 30.
As of Sep 30, 2023, 3D Systems had a total debt of $451.5 million, slightly up from $450.8 million as of Jun 30.
Restructuring Details
3D Systems announced a restructuring initiative in October 2023 that is expected to deliver incremental cost savings of $45 - $55 million by the end of 2024.
It plans to release 39 new printer systems in 2024.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -8.33% due to these changes.
VGM Scores
At this time, 3D Systems has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, 3D Systems has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
3D Systems belongs to the Zacks Computer - Mini computers industry. Another stock from the same industry, Apple (AAPL), has gained 5.2% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
Apple reported revenues of $89.5 billion in the last reported quarter, representing a year-over-year change of -0.7%. EPS of $1.46 for the same period compares with $1.29 a year ago.
For the current quarter, Apple is expected to post earnings of $2.08 per share, indicating a change of +10.6% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.6% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Apple. Also, the stock has a VGM Score of D.
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