Why 3D Systems (DDD) Is Down Today

NEW YORK (TheStreet) -- 3D Systems (DDD) fell 2.9% to $87.91 Tuesday following a downgrade from Credit Suisse.

Credit Suisse downgraded the 3D printing company to "neutral" from "outperform," with a price target of $90. Credit Suisse said it believes there is a chance that 3D Systems' guidance for 2014 will be disappointing. The firm cited higher research and development costs from a recent Xerox (XRX) transaction, incremental sales, and high marketing expenses as possible reasons for a disappointing guidance.

Credit Suisse also cited the valuation of 3D printing competitor Stratasys (SSYS) in the downgrade for 3D Systems. In the same report, Credit Suisse upgraded Stratasys to "outperform" from "neutral," with a price target of $144.

TheStreet Ratings team rates 3D SYSTEMS CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about its 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%.

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