In this article, I will take a look at 3D Systems Corporation’s (NYSE:DDD) most recent earnings update (30 September 2017) and compare these latest figures against its performance over the past few years, along with how the rest of DDD’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. See our latest analysis for DDD
How DDD fared against its long-term earnings performance and its industry
I like to use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend allows me to assess different stocks on a more comparable basis, using new information. 3D Systems’s most recent twelve-month earnings -$50.8M, which, against last year’s figure, has become less negative. Since these figures are relatively short-term thinking, I’ve estimated an annualized five-year figure for DDD’s net income, which stands at -$81.4M. This means that, even though net income is negative, it has become less negative over the years.
We can further examine 3D Systems’s loss by looking at what has been happening in the industry as well as within the company. Firstly, I want to briefly look into the line items. Revenue growth over past few years has increased by 17.43%, implying that 3D Systems is in a high-growth period with expenses racing ahead high top-line growth rates. Looking at growth from a sector-level, the US technology hardware, storage and peripherals industry has been growing its average earnings by double-digit 14.10% over the previous year, and a less exciting 6.51% over the previous few years. This suggests that, even though 3D Systems is currently unprofitable, it may have been aided by industry tailwinds, moving earnings towards to right direction.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always difficult to predict what will happen in the future and when. The most useful step is to examine company-specific issues 3D Systems may be facing and whether management guidance has regularly been met in the past. You should continue to research 3D Systems to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for DDD’s future growth? Take a look at our free research report of analyst consensus for DDD’s outlook.