3D Systems (DDD, Financial) saw its stock plummet by 8.15% today, closing at $2.14. This significant decline follows the company's latest quarterly report, which featured a double miss on both revenue and earnings expectations.
On Thursday, 3D Systems released its Q2 results, revealing a 12% year-over-year revenue drop to just over $113 million. This decline was primarily due to lower sales of printers, mainly from a reduced purchase by an unnamed customer in the dental field. The drop was partially offset by increased services revenue, but it wasn't enough to prevent the overall decline.
3D Systems' GAAP net loss for Q2 was $27.3 million, a slight improvement from the nearly $29 million loss in Q2 2023. On a non-GAAP basis, the per-share net loss was $0.14, missing analyst expectations of a $0.05 loss per share. Analysts had also expected higher revenue of $116.6 million, marking a double miss for the quarter.
3D Systems updated its full-year 2024 revenue guidance to $450 million to $460 million. Even at the high end, this is below 2023's revenue of over $488 million and the average analyst estimate of $474 million. The company also projected that its adjusted EBITDA should be near break-even for Q4 but did not provide an annual forecast or bottom-line guidance.
From an analytical perspective, 3D Systems (DDD, Financial) currently exhibits several severe warning signs. The company's financial health is under considerable stress, with a Piotroski F-Score of 3, which usually implies poor business operation. Additionally, the Altman Z-score of -1.68 places the company in the distress zone, suggesting a possibility of bankruptcy within the next two years.
However, there are some positive notes. The Beneish M-Score of -2.59 indicates that the company is unlikely to be manipulating its earnings. Moreover, the stock price is close to its 10-year low, which might attract value investors.
The GF Value for 3D Systems is estimated at $8.09, suggesting that the stock might be significantly undervalued. [GF Value]
Despite these potential positives, the current market sentiment is fraught with caution. The company has a predictability rank of 1, indicating low confidence in its earnings predictability. Moreover, the stock has shown a year-to-date price change of -66.3%, further eroding investor confidence.
Given the combination of severe financial stress indicators and underperformance, potential investors should tread carefully. The stock may present a value opportunity, but the inherent risks should not be underestimated.
