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3D Systems Gets A Lift From Piper Upgrade

Jayson Derrick

The bearish case for 3D Systems Corporation (NYSE: DDD) can no longer be justified, according to Piper Jaffray.

The Analyst

Piper Jaffray's Troy Jensen upgraded 3D Systems from Underweight to Neutral with a price target lifted from $14 to $17.

The Thesis

3D Systems is likely to benefit from improving product growth which should benefit the stock for four reasons, Jensen said in the note. These include:

  • 3D Systems' second-quarter report showed strong product sales, likely the result of the company's strategic win with Align Technology. The momentum should carry over throughout the next few quarters as first-hand checks and conversations suggests Align ordered around 100 high-end SLA machines. This would represent the biggest deal in the entire 3D printing industry and could generate $35 to $40 million in system revenues.
  • 3D Systems showed two consecutive quarters of re-accelerating growth on a year-over-year basis. Coupled with the Align deal, the company's accelerating product growth should continue to accelerate moving forward.
  • Piper Jaffray's survey with reseller suggests service bureau demand was better than expectations.
  • The launch of multiple Figure 4 platforms represents a catalyst for 2019 and beyond. The company confirmed it started shipping certain systems to resellers and expects sales cycles to last around six to nine months.

Price Action

Shares of 3D Systems were trading higher by more than 8 percent to $18.07.

Related Links:

Analyst: 3D Systems Is Making The Right Moves

3D Systems' 'Undeniably Sensible' Story

Latest Ratings for DDD

Date Firm Action From To
Oct 2018 PiperJaffray Upgrades Underweight Neutral
Aug 2018 B. Riley FBR Maintains Sell Sell
Jul 2018 PiperJaffray Downgrades Neutral Underweight

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