3D Systems (NASDAQ:DDD) was among the worst performers last year; the company’s shares dipped 37% in the previous twelve months, amid increasing losses and lower than expected revenue growth. After hitting the seven-year low of $8 at the beginning of 2018, 3D Systems stock price bounced to $11 in the next two months.
The growth in DDD share price was supported by the expectations for a huge turn around in the company’s business strategy and product portfolio. Trader’s expectations for improved revenue growth in the final quarter added to traders sentiments.
3D Systems is a leading manufacturer of 3-D printers, print materials, digital design software and on-demand manufacturing services.
Preliminary Results
Though the company has delayed its fourth-quarter results, the preliminary results show that it has topped revenue expectations by a wide margin. The company expects its fourth-quarter revenue to land in the range of $178 million, higher from past year quarter revenue of $165 million and exceeding the consensus estimate of $162 million. 3D Systems also anticipates revenue growth of 2% for the full year.
“We are pleased with the growth in revenue driven by healthcare, materials, software and on-demand manufacturing, as well as more balanced regional execution experienced in the fourth quarter,” commented Vyomesh Joshi (VJ), chief executive officer, 3D Systems.
On the negative side, its losses are enlarging amid the strategy of investing in the product portfolio. The loss for the fourth quarter is likely to stand in the range of $0.10, higher from the loss of $0.05 in the same period last year.
>>Find Out Why 3D Systems Were Struggling
Analysts Downgraded 3D Systems Stock Price Target
JP Morgan has downgraded 3D Systems stock to Underweight from Neutral with a target price of $11. JP analysts cite higher valuation for the downgrade, and don’t believe it is a good short candidate stock.
Overall, analysts believe that 3D Systems have to make a massive transformation to compete with its counterparts. At the same time, they need to focus considerably on its margins and cost-cutting to narrow the losses in the following quarters.
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