William Blair & Company Reiterates on 3D Systems Following Recovery After 3Q Report

In a report published Tuesday, William Blair & Company analyst Brian Drab reiterated an Underperform rating on 3D Systems (NYSE: DDD).

In the report, William Blair & Company noted, “3D Systems reported third-quarter results on October 29, 2013. The stock is up 34% since the report (closed at $56.98 on October 28, 2013). Although the stock was down almost 10% in premarket trading after the earnings report was issued, shares recovered and closed up 4% that day. The reason (in our view) the stock was down in premarket trading was management's significant downward revision of earnings guidance—with the midpoint of the EPS guidance range down 13%. The primary reasons (in our view) the stock recovered were: 1) the company reported better-than-expected revenue growth, including 30% organic revenue growth, and 2) investors gave the company a pass on the downward earnings revision primarily because management said the pressure on earnings was attributable to the company's decision to ‘materially accelerate R&D and marketing spending' to ‘compress plans to commercialize a number of significant new products' and ‘ramp up retail field operations'.”

3D Systems closed on Monday at $76.10.