3D Systems: Hold Rating Amid Mixed Financial Performance and Market Challenges
William Blair analyst Brian Drab has maintained a Hold rating on 3D Systems (DDD) stock due to mixed financial performance and market challenges. The company's revenue and adjusted EBITDA fell short of expectations, while adjusted EPS slightly exceeded estimates. Despite progress in cost-saving initiatives, the additive manufacturing market remains weak. However, strong performance in aerospace and defense sectors is a positive sign. Management anticipates modest revenue growth in Q4, with stable gross margins and operating expenses. Craig-Hallum also maintains a Hold rating with a $2.50 price target.
William Blair analyst Brian Drab has maintained their neutral stance on DDD stock, giving a Hold rating today.
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Brian Drab has given his Hold rating due to a combination of factors related to 3D Systems’ recent financial performance and market conditions. The company’s revenue and adjusted EBITDA fell short of consensus expectations, although adjusted EPS slightly exceeded estimates. Despite these mixed results, 3D Systems is making progress on its cost-saving initiatives, which include consolidating its operational footprint and restructuring its workforce, aiming for over $50 million in annualized savings by year-end.
However, the broader market for additive manufacturing remains weak, with customers hesitant to make capital investments due to an uncertain tariff environment. On a positive note, the aerospace and defense sectors are performing well, contributing positively to the company’s sales. Management’s guidance for the fourth quarter suggests a modest sequential revenue increase, with gross margins and operating expenses expected to remain stable. These factors collectively support the Hold rating, as they indicate potential for improvement but also highlight ongoing challenges.
In another report released today, Craig-Hallum also maintained a Hold rating on the stock with a $2.50 price target.
