NEW YORK (TheStreet) -- 3D Systems (DDD) - Get Report was falling 4.9% to $64.01 Monday following a Barron's cover story that featured the 3D printer maker and warned against investing in the 3D printing industry.
The cover story, titled "Beware 3-D Printing!" warns against investing in 3D printing stocks, saying they seem overvalued based on earnings and sales metrics. Barron's suggests that shares of3D Systems could fall as much as 80% and still be overvalued.
While criticism of 3D printing shares isn't new, the article seemed to cause many to sell their shares of 3D Systems. More than 4.8 million shares of the company were traded by 11:30 a.m.
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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 several positive factors, 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 4.7%. 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 ($0.81 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 -4.13%.
- You can view the full analysis from the report here: DDD Ratings Report
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.