3D Systems (DDD) In A Perilous Reversal

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.

Trade-Ideas LLC identified 3D Systems ( DDD) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified 3D Systems as such a stock due to the following factors:

  • DDD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $43.5 million.
  • DDD has traded 517,692 shares today.
  • DDD is down 3.1% today.
  • DDD was up 5.5% yesterday.

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More details on DDD:

3D Systems Corporation, through its subsidiaries, operates as a provider of 3D printing centric design-to-manufacturing solutions in the Americas, Germany, and the Asia-Pacific, as well as other European, the Middle East, and African countries. Currently there are 3 analysts that rate 3D Systems a buy, 4 analysts rate it a sell, and 11 rate it a hold.

The average volume for 3D Systems has been 2.6 million shares per day over the past 30 days. 3D Systems has a market cap of $2.3 billion and is part of the technology sector and computer hardware industry. The stock has a beta of 1.76 and a short float of 33.5% with 16.89 days to cover. Shares are down 34.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates 3D Systems as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Computers & Peripherals industry. The net income has significantly decreased by 370.3% when compared to the same quarter one year ago, falling from $4.88 million to -$13.18 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Computers & Peripherals industry and the overall market, 3D SYSTEMS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$0.94 million or 404.22% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 61.16%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 340.00% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • 3D SYSTEMS CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, 3D SYSTEMS CORP reported lower earnings of $0.11 versus $0.44 in the prior year. This year, the market expects an improvement in earnings ($0.55 versus $0.11).

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