Categories Earnings, Technology

Earnings preview: Q1 likely to be another slow quarter for 3D Systems

3D Systems Corp (NYSE: DDD) is set to report first-quarter 2019 results on May 7, Tuesday, at 4 PM ET. The maker of 3D printers is expected to report a loss of 1 cent per share, on revenues of $166.16 million.

The revenue suggests an almost flat growth from the year-ago period. This is especially worrying because its not a one-off case. The company has been witnessing a steady deceleration in top-line growth, which has also started affecting its stock.

DDD shares have been almost flattish so far this year, gaining a modest 2%. During the same period, Israel-based rival Stratasys Ltd (NASDAQ: SSYS) has recorded a growth of 26%.

Investors are pinning their hopes on the company’s new products to drive revenues in fiscal 2019. However, most of the positive impact from its new products are likely to show up only after the first quarter. Continued delay in the shipping of the modular Figure 4 systems has also irked investors.

READ: FORMLABS – A UNICORN MOLDING ITS SPACE IN THE 3D PRINTING MARKET

Meanwhile, the management seems quite optimistic about the company’s growth somewhere around the second half of the year, though it has declined to provide an outlook.

3D investors also need to keep track of the company’s free cash flow, which fell from the year-ago period in fiscal 2018. Though this was primarily due to new product launches, investors will need to ensure that the company has returned to stable cash flow levels.

The stock has a 12-month average price target of $10.78, suggesting a 3% upside from its last close.

On Friday, Stratasys reported quarterly adjusted earnings that doubled, helped by its cost control measures. Revenues edged up 1% to $155.3 million.

 

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