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发帖数: 453 | 1 3D Systems Corporation's (NYSE:DDD)'s Q2 results shocked most investors. The
3D printing company had been targeting 30%-plus organic growth rate. But
organic growth plunged to just 10% in the second quarter. However, company
management believes that it was a function of timing. 3D Systems CFO Damon
Gregoire told Morgan Stanley analysts Scott Schmitz and Katy Huberty that he
was confident the company would achieve a 30% organic growth rate over the
next couple of years.
Morgan Stanley analysts initiated coverage of the stock with an Equal weight
rating earlier this month. Gregoire said at the International Manufacturing
Technology Show in Chicago last week that new products, channel leverage
and addition of metals to organic growth calculation should fuel growth in
the current half of this year.
Operating leverage also is expected to improve thanks to a rebound in the
growth rate and controlled OpEx investments. The company spends 30% of its
sales on OpEx. However, Morgan Stanley said the operating leverage
improvement is already factored into expectations. Wall Street expects the
company's Q3 and Q4 operating margins to come in at 19% and 20.8%, much
better than 15.4% in the June quarter. Morgan Stanley expects OpEx
investments to affect margin improvements in the long term.
Execution risk remains high for 3D Systems
3D Systems favors a broad product portfolio as there are different processes
to serve different use cases. Overlapping technologies reduce the amount of
required R&D compared to investing in many separate processes. Moreover,
the company has an aggressive acquisition strategy. It usually targets early
stage businesses that help it build vertical expertise. It may hamper short
-term earnings but offers more favorable valuations in the long run.
3D Systems' new product launches, broad portfolio and expanding distribution
may help it grow. The company management's way of explaining its strategy
makes sense. But Morgan Stanley analysts are skeptical about the acquisition
success rate due to high execution risk.
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