In the report, the firm, most well known for its short-selling ideas, set a near-term price target for 3D Systems at $56. Citron cites two recent earning reports from 3D Systems that missed analyst estimates.
The 3D printing company is set to report another quarter with marginal profits, Citron says. It uses a quote from CEO Avi Reichental to support the statement. At the Needham Investment Conference in January, Reichental said, "[W]e're absolutely willing to tolerate temporary earnings compression and even a slight margin compression during this period of substantially accelerated growth rate and market share expansion."
Citron also compares 3D Systems to competitor Statasys (SSYS), which owns Makerbot. The firm points out that Makerbot 3D printers have more reviews on Amazon (AMZN), and generally receive higher ratings.
TheStreet Ratings team rates 3D SYSTEMS CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate 3D SYSTEMS CORP (DDD) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 2.8%. Since the same quarter one year prior, revenues rose by 49.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Although DDD's debt-to-equity ratio of 0.02 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 4.40, which clearly demonstrates the ability to cover short-term cash needs.
- 3D SYSTEMS CORP has improved earnings per share by 6.3% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, 3D SYSTEMS CORP increased its bottom line by earning $0.47 versus $0.47 in the prior year. This year, the market expects an improvement in earnings ($0.97 versus $0.47).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Computers & Peripherals industry average. The net income increased by 30.6% when compared to the same quarter one year prior, rising from $13.52 million to $17.66 million.
- Net operating cash flow has increased to $31.64 million or 39.80% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 6.77%.
- You can view the full analysis from the report here: DDD Ratings Report