3D Systems Drops 5.7% Pre-Market As 4Q Profit Lags Estimates; Street Says Hold

3D Systems delivered a better-than-expected 4Q topline but shares of the digital printing manufacturer were dragged down in Tuesday’s pre-market trading session as quarterly profit missed the Street consensus.

3D Systems (DDD) posted adjusted earnings of $0.09 per share, up 80% year-over-year, but falling short of analysts’ expectations of $0.10 per share. The increase in bottom line was driven by the company’s focus on cost restructuring.

Revenue increased 2.6% year-over-year and 26.8% sequentially to hit $172.7 million, topping analysts’ estimates by $0.91 million. 3D Systems said it continued to see a rebound in customer activity. Sales from the company’s healthcare segment recorded 48% year-over-year growth in 4Q driven by higher sales in dental and medical applications.

3D Systems CEO Jeff Graves said, “With our singular focus on additive manufacturing, we were pleased to deliver strong growth at the end of what was an unprecedented year. The execution of our four-stage plan to deliver increased value to our customers and shareholders, initiated in the summer of 2020, took hold and rapidly gained momentum as we moved through the second half of the year.”

Graves expects emerging regenerative medicine to be an increasingly significant part of the company’s healthcare business in the coming years. (See 3D Systems stock analysis on TipRanks)

For fiscal 2021, 3D Systems sees gross profit margin to be in the range of 40% to 44%.

3D Systems also announced its annual filing on Form 10-K will be delayed due to cash flows related to its divestment plan for the Cimatron and GibbsCam Software businesses. Instead, it will file a Form 12b-25 (notification for late filing) with the SEC. The company now expects to file the Form 10-K no later than March 16.

Stifel Nicolaus analyst Noelle Dilts recently initiated coverage on the stock with a price target of $28 (28% downside potential)  and a Hold rating. Dilts likes the company’s “strategy to profitable growth that was announced last year, as well as 3D’s broad product offering, large installed base, and strong sales and marketing infrastructure.”

The rest of Wall Street is in line with Dilts’ outlook on the stock. The Hold consensus rating shows 5 Holds and 1 Sell. The average analyst price target of $24.80 implies about 36% downside potential from current levels. That’s after shares exploded 329% over the past three months.

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