William Blair Reiterates Underperform On 3D Systems Following 3Q14 Results
William Blair analyst Brian Drab reiterated an Underperform rating on 3D Systems Corp (NYSE:DDD), following the company’s third-quarter results that that were in line with consensus expectations, with revenue of $167 million (consensus of $169 million) and adjusted EPS of $0.18 (consensus of $0.18).
Drab, wrote, “We believe the valuation is loftier than those metrics imply. The company reported GAAP EPS of $0.03 in the third quarter and $0.18 on an adjusted basis. We believe amortization of wasting intangible assets and acquisition-related expenses account for roughly one-third of the $0.15 adjustment, or about $0.05. Given that 3D Systems is a serial acquirer (46 acquisitions in the last five years), we do not believe exclusion of amortization of wasting intangible assets and acquisition-related expenses accurately reflects the company’s earnings power. If we were to include the amortization of wasting intangible assets and acquisition-related expenses in a true adjusted EPS figure, our 2015 EPS estimate would be about $0.85-$0.95. Applying a forward earnings multiple range of 20-25 times implies shares should trade within a range of $17-$24, well below today’s $35 share price.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Brian Drab has a total average return of -0.8% and a 47.1% success rate. Drab has a 13.6% average return when recommending DDD, and is ranked #2546 out of 3384 analysts.