by Ian Harvey
March 26, 2021
3D Systems has become part of Cathie Wood’s Ark Investment, which has been a catalyst, along with a major pull-back after earnings, as well as an expected forward double-digit [year-over-year revenue] growth rate; which has helped propel the stock price upwards.
“Cut-to-the-Chase Members” managed to gain a potential profit of 100% within the trading day.
Another trade is being considered – don’t miss out.
The Actual Recommended Trade.....
** OPTION TRADE: Buy DDD APR 16 2021 25.000 CALLS at approximately $2.00. (actual entry price was $1.65)
The Profit Explained…..
“Cut-To-The-Chase Members” entered a trade on 3D Systems Corporation Thursday, March25, 2021 for $1.65, shortly after trading commenced for the day - at 9:32am.
By 12:43pm the price of the option had hit $3.24 – a nice profit of 100%.
Why The Trade Recommendation On 3D Systems?
Despite its more recent pullback, 3D Systems is still up 174% this year through March 19. The S&P 500 has returned 4.6% over this period.
Note that Cathie Wood’s Ark Invest continues to add more shares to its holdings with it picking out 3D Systems.
ARK Autonomous Technology & Robotics ETF (BATS:ARKQ) picked up 558,900 shares of DDD stock yesterday.
Cathie Wood’s investments have been something that investors track as her ETFs have been gaining more attention of late. The investor has become a favorite on social media for her well-researched investments that age well over time.
About 3D Systems.....
3D Systems Corporation, through its subsidiaries, provides 3D printing and digital manufacturing solutions worldwide.
The company offers 3D printers, such as stereolithography, selective laser sintering, direct metal printing, multi jet printing, and color jet printers that transform digital data input generated by 3D design software, computer aided design (CAD) software, or other 3D design tools into printed parts under the Accura, DuraForm, LaserForm, CastForm, and VisiJet brand names.
Earlier this month, 3D Systems reported fourth-quarter and full-year 2020 results. For the quarter, the 3D printing company's revenue rose 2.7% year over year to $172.7 million, driven by strength in the healthcare segment. Adjusted for one-time items, net income widened 93% to $10.6 million, which translated to an 80% jump in earnings per share (EPS) to $0.09.
Shares plunged 19.6% the following day. The fact that the results were preliminary and that management didn't issue revenue or earnings guidance probably helped drive the market's negative reaction.
Some investors also might have been concerned that the slight Q4 adjusted EPS -- by just $0.01 -- missed the Wall Street expectation, though it seems unlikely that was a noble factor. In addition, general market dynamics probably played at least a minor role. During the time the company reported, investors were rotating out of highly valued so-called growth stocks, particularly those in the technology realm, because of concerns about heating up inflation.
From CEO Jeffrey Graves' remarks.....
I think the double-digit [year-over-year revenue] growth rate is perfectly attainable in our core business. ... [There could] be some short-term noise as we may or may not choose to divest some assets. ... But when you look at our core additive manufacturing business, I'm very bullish on double-digit growth.
As to this comment, the "core business" would exclude any acquisitions or divestitures the company makes in 2021. Graves prefaced his assertion by saying it's based on the negative impacts of the receding COVID-19 pandemic and rebounding global economies.
Also, from Graves' remarks.....
I'm particularly excited around healthcare. I think a lot of folks put off healthcare treatments during the COVID period, and [in the fourth quarter] they've come back strongly in both dentistry and other medical applications.
I think, once we get through summertime, unless these variants in the virus prove to be substantial, it looks like that momentum will continue and just continue to accelerate as the world opens.
It's a given that increased revenue growth in the healthcare segment would be a good thing. But it's an even better thing when you consider that the healthcare business "brings a bit higher gross margin on average than our industrial business," as Graves said. In other words, revenue growth in the healthcare business should have an outsize positive effect on the company's bottom-line results.
3D Systems announced collaboration with Huntington Ingalls Industries’ Newport News Shipbuilding division to develop new alloys. The two companies are developing Copper-Nickel (CuNi) and Nickel-Copper (NiCu) alloys for direct metal printing.
3D Systems’ (DDD) co-founder Chuck Hull said, “Customer-centric innovation has been a driving force for 3D Systems since its founding. Through our on-going collaboration with Newport News Shipbuilding, we have yet another opportunity to bring to bear our deep materials science and application engineering expertise – allowing our customers to maximize the power of additive manufacturing within their organization.”
3D Systems has long-term experience of contributing additive manufacturing know-how to the U.S. Navy. Its solutions are used in aircraft parts and submersible components.
On March 2, Needham analyst James Ricchiuti reiterated a Hold rating on the stock without assigning any price target. Ricchiuti said, “Investor sentiment in the 3D printing space has been improving in recent months, reflecting signs of a gradual industry recovery and in the case of 3D Systems more optimism about new management’s efforts to restart growth and drive operating leverage in the model. There is potential for more significant upside in earnings coming mainly from cost-reduction initiatives going forward.”
Several analysts have recently commented on the company.....
3D Systems has a Hold consensus rating based on 9 Holds and 1 Sell and one buy rating. The average analyst price target is $26.50.
The stock has seen a jump of about 332.6% over the past year.
3D Systems has a quick ratio of 1.30, a current ratio of 2.09 and a debt-to-equity ratio of 0.05. 3D Systems has a 1 year low of $4.60 and a 1 year high of $56.50. The firm has a market capitalization of $3.60 billion, a P/E ratio of -25.23, and a PEG ratio of 4.89 and a beta of 1.97. The business’s 50-day moving average price is $37.49 and its 200-day moving average price is $17.94.
Will 3D Systems Continue Its’ Upward Trek?
Will We Recommend Another Trade On 3D Systems?
What Other Trades Are We Anticipating?
Do You Wish To Be Part Of This Action?
An Important Note: That any suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.
It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented. GREED can be the undoing of a nice profit!