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Key Points
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The 3D printing specialist, a onetime investor favorite, posted lackluster quarterly results.
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This generated a downbeat research update from an analyst tracking the stock.
A disappointing earnings report was the main news item driving down 3D Systems (NYSE: DDD) over the past few trading days, a situation compounded by a significant price target reduction from an analyst. This eroded the company's share price, which had fallen by nearly 30% week to date as of early Friday morning, according to data compiled by S&P Global Market Intelligence.
Quarterly declines and misses
In its first quarter, reported on Monday, 3D Systems saw its revenue decrease by 8% year over year to $95 million. Following a similar trajectory, the company's non-GAAP (adjusted) net loss widened to $0.21 per share from the year-ago shortfall of $0.17. The company also withdrew its full-year 2025 guidance. Finally, both headline metrics missed their respective consensus analyst estimates.
In its earnings report, 3D Systems wrote that it aims to reduce costs by $50 million to help improve the bottom line. These cost-cuts should be enacted by the middle of next year, but the sharp sell-off following the publication of the results indicates that investors might not feel this effort will be successful.
One person who didn't have an enthusiastic reaction to 3D Systems' latest news was Craig-Hallum analyst Greg Palm. On Wednesday the pundit cut his price target on the stock by 20%, reducing it to $2 per share from the previous $2.50.
Neutral at $2
Although he maintained his neutral recommendation on 3D Systems stock, according to reports Palm expressed surprised at the company's significant misses in the quarter. He added that management has to convince investors that it can turn the current situation around, however it needs to execute more effectively.
I share this view, only I'm more bearish on the company. To me, it's the story of a still-promising technology that isn't being well promoted or developed by the 3D Systems team. Like Palm, I think it has much to prove in the proximate future.
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