The firm made the downgrade based on market valuation while setting a $50 price target on the company's shares.
"We believe 3D Systems will be able to deliver within its revenue and earnings guidance. For 2014, we are projecting revenue of $701 million, in the mid-end of the company's guidance, and EPS of $0.77, slightly below the mid-end of the earnings guidance," said analysts.
Shares closed trading up 1.2% to $49.90 today.
Separately, TheStreet Ratings team rates 3D SYSTEMS CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate 3D SYSTEMS CORP (DDD) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. 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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, disappointing return on equity and premium valuation."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 4.3%. Since the same quarter one year prior, revenues rose by 44.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in 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 3.66, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for 3D SYSTEMS CORP is rather high; currently it is at 51.12%. Regardless of DDD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, DDD's net profit margin of 3.30% is significantly lower than the industry average.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Computers & Peripherals industry and the overall market, 3D SYSTEMS CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full analysis from the report here: DDD Ratings Report