Story updated at 10 a.m. to reflect market activity.
Shares of 3D Systems gaing 1.8% to $48.78 in morning trading.
The analyst firm also lowered its EPS estimates for the 3D printing company through 2016. The lower price target and estimates are a result of a fall in revenue and weak second quarter results according to UBS analysts.
Must read: Warren Buffett's 25 Favorite Stocks
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 8.9%. 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.
- DDD's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. 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