Wednesday, February 27, 2013

Hot Research: "3D Systems Outlook Slightly Flatter" (DDD)

The stock is trading up 3% at $36.20. This has been a rough month for DDD, is is down from a split adjusted (3:2 on the 25th) $44.93. Right now putting money in the 3D companies is not investing but rather is more akin to riding a tiger. By the time the bet is investing, with discounted cash flows and everything, the move will be over.
Any projections are at best educated guesses so caution is advised, at Monday's low the stock had suffered a 32% bear market in 20 days.
"Hot Research" is the name of the Barron's column:
Maxim Group cut the target price on the printer maker to $40 from $42.
3D Systems (DDD: NYSE)
By Maxim Group ($34.55, Feb. 26, 2013)

3D Systems reported December quarter revenue of $101.6 million, up 45% year-over-year and up 12% quarter-over-quarter, or modestly below Wall Street estimates of $103.9 million. This is a moderation in momentum when compared to March and September quarters when it reported annual growth of 63% and 57%, respectively.

We are increasing our 2013 revenue and non-GAAP earnings-per-share estimates for 3D (ticker: DDD) to $461.5 million and $1.12, respectively, from $457.3 million and $1.05, respectively. We are also increasing our 2014 revenue and non-GAAP EPS estimates to $548.5 million and $1.30, respectively, from $526.8 million and $1.35, respectively.

Our price target [down to $40 from $42] reflects a 30 times multiple on our calendar 2014 non-GAAP EPS estimate of $1.30 plus cash/per share of $1.81. The multiple represents a price-to-earnings growth multiple of 1.2 times or in line with the peer group average. On an absolute basis, the stock currently trades at 47 times trailing 12 months price/earnings or 3.4 times the Standard & Poor's 500 multiple. We are reducing our target on lower valuation multiple due to limited operational leverage and higher printer mix. Institutional money flow is very weak. Near-term support and resistance are at $29.25 (40-week moving average) and $39.93 (10-week moving average), respectively....MORE