A Vote of Confidence for 3D Systems and CalAmp

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Canaccord Genuity has lifted its price target on two tech firms, one very avidly followed and heavily traded, and the other significantly smaller and less actively traded.

3D Systems Inc. (DDD) has the highest market cap of any of the 3D printer companies at $9.35 billion. The stock closed at $90.94 on Monday after putting up a new high for its 52-week range of $27.88 to $91.01. Canaccord Genuity lifted its 2014 price target from $85.00 to $95.00 a share going into next month’s Consumer Electronics Show. Based on the new target, 3D Systems has an upside potential of about 4.5%.

The consensus 2014 earnings per share (EPS) estimate is $1.28, up 33% from expected 2013 EPS of $0.96. Like all 3D printer makers, the consensus forward multiple is very high, just over 71. The stock’s trailing P/E ratio is an even higher 196.84. The 3D printer stocks are tagged as growth plays, and any news that affects one usually affects them all. Nearly 4.7 million shares are traded on an average day.

Canaccord Genuity also raised its price target on CalAmp Corp. (CAMP) Tuesday, boosting it from $30.00 a share to $33.00. CalAmp makes wireless equipment and has a market cap of around $960 million. The company posted strong third-quarter results after markets closed Monday, and Canaccord expects strong growth in both the 2015 and 2016 fiscal years, based on the company’s expected fourth-quarter showing. Interestingly enough, CalAmp’s fourth-quarter estimates were slightly below consensus estimates.

CalAmp’s stock closed at $27.56 on Monday in a 52-week range of $7.65 to $29.74. Based on Canaccord’s price target of $33, the potential upside on the stock is about 11%. The forward price-to-earnings (P/E) ratio is 26, which could mean that the shares are somewhat overbought. The consensus EPS estimate for the 2014 fiscal year (ending in February) is $0.80, and for the 2015 fiscal year it is $1.06, a jump of about 33%. CalAmp trades around 560,000 shares a day.

While CalAmp has good growth prospects, the company plays in a sector where size can be a potent factor. Nokia Corp.’s (NOK) NSN group, Ericsson (ERIC), Cisco Systems Inc. (CSCO) and Alcatel-Lucent S.A. (ALU) are the competition, and it is not far-fetched to see CalAmp as a potential acquisition at some point.

3D Systems has been on an acquisition spree in the past year and plans to continue to grow through additional acquisitions. Again, this can be a risky strategy because melding new acquisitions in with existing assets can be tricky. The good news for 3D Systems is that most of its acquisitions are on the small side and it is reasonably easy to fold these in with the rest of the company.

CalAmp’s shares were trading down about 7.3% to $25.55 in Tuesday premarket trading. 3D Systems shares also traded down, at $89.79, off about 1.3%.


Filed under: Technology Tagged: ALU, CAMP, CSCO, DDD, ERIC, NOK

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