3D Systems (NYSE:DDD) is having a truly awful time in 2014. Its shares have declined massively, essentially because of its declining earnings. The organization's last reported first quarter wasn't dependent upon expectations as a result, despite the fact that it conveyed a 45% hop in revenue. Actually, 3D Systems' earnings dropped 28% year-over-year, while its direction was also below expectations. In any case, 3D Systems is a development stage organization, and its bottom line is sure to take a couple of hits as it looks for development.
An enormous open door ahead
As I would see it, 3D Systems is making the best choice by focusing on development, as it is attempting to catch the 3D printing market as much as possible. This is a smart move, as the business sector is required to develop in leaps and bounds going ahead. As indicated by a CNBC report:
"Companies specializing in 3-D printing may have been marked the 'most hideous' stocks as of late; however the sector will keep on produing stellar development over the impending years, as per latest research."
- Warning! GuruFocus has detected 4 Warning Signs with DDD. Click here to check it out.
- DDD 15-Year Financial Data
- The intrinsic value of DDD
- Peter Lynch Chart of DDD
The size of the worldwide business sector, including 3D printer sales, materials and associated services, is anticipated to arrive at $16.2 billion by 2018, as indicated by autonomous research organization Canalys. Its estimates show the sector stood at $2.5 billion all around in 2013 and will rise to $3.8 billion in 2014. What's more in five years the organization believes the business will develop by in excess of 500 percent with a year-over-year development rate of 45.7 percent.
3D printing – making three-dimensional solid objects from computerized models – is social affair energy and is transforming everything from prescription to home goods. Printers that once cost $30,000 now are valued closer to $1,000 and can possibly revise the rules of worldwide assembling."
Tapping the business sector successfully
Truth be told, 3D Systems is as of now tapping this fast-developing market adequately. In the first quarter, it experienced fantastic interest for various products and services. It saw 76% unit sales development in the professional segment. Likewise, the development rate of its materials business was a record 41%, headed by sales of cutting edge 3D printers. Besides, 3D Systems left the quarter with 17.9 million printer orders, demonstrating strong interest in the organization's Direct Metal 3D printers. Actually, interest in its printers outstripped assembling limit.
Going ahead, 3D Systems plans to venture into new applications with new item materials and services such as Direct Metal 3D printers and Multi Metal 3D printers that are fit for printing completely utilitarian parts and assemblies. Besides, the organization is also occupied with pushing its 3D printing 2.0 capabilities.
The organization believes that 3D printing 2.0 will structure the eventual fate of 3D printing as it features high velocity, multi-material and fab-grade 3D printing developments.
3D Systems is also focusing on its consumer segment that developed 150% in the previous quarter. The organization has as of now started shipping the Cube3, Cubepro and isense scanners, which will quicken its development in the consumer classification in the second half of 2014. Also, the organization is picking up footing in the business with new consumer products such as Chefjet, Cerajet and Cubejet 3D printers. 3D Systems is also wanting to take off business shipments in these categories in the second a large portion of the year to further strengthen its position.
Acquisitions should help development
Also, 3D Systems is also focusing on acquisitions to advance the customer experience. It as of late procured Medical Modeling to infiltrate the quickly developing medicinal services class. This is a solid proceed onward the organization's part because it is estimated that restorative 3D printing is worth billions of dollars.
Since Medical Modeling has FDA-cleared processes and bleeding edge expertise, and has the experience of conveying thousands of surgical arranging tools and facial prosthetic devices, it should permit 3D Systems to increase its presence in the therapeutic classification significantly.
Analysts have anticipated that 3D Systems' earnings will develop at a CAGR of 22% for the following five years, higher than the industry normal of 15.26%.
In addition, the organization has a positive obligation profile and a good looking cash position. 3D Systems has $307 million in cash on the asset report, while its obligation stands at less than $19 million. Presently, considering the prospects in the 3D printing industry, the stock looks like a good one to invest in.