Credit Suisse Reviews 3D Systems' Atrocious Preannouncement

In a report published Monday, analysts at Credit Suisse maintain their Neutral rating on

, while lowering the price target from $54 to $40. The analysts expect the macro headwinds to impact the company's Q1 performance. The company has announced disappointing preliminary results for Q1, with revenue of $158-$160 million and adjusted EOS of $0.02-$0.04, impacted by Fx and macro headwinds, as well as delayed shipments as a result of metal/nylon printer issues at the company. However, the full year guidance of organic sales worth growth of 20 percent has been maintained. According to Credit Suisse, "Management is confident demand will return in subsequent quarters as OEMs have adjusted to the current environment and orders have picked up in Q2; we remain cautious given the recent trend of missed quarterly expectations." The disappointing top-line in Q1 was essentially due to the industrial printers segment, while other categories, such as software, services and consumer products, posted strong performances. "Driven by the macro environment, large industrial customers (particularly automotive, aerospace, and healthcare end markets) reduced investments in Q1. However, management is confident that demand will return to meet its full year expectations," the analysts said. 3D Systems, however, posted gross margin growth of 110 bps, sequentially, for Q1, while posting cash opex growth of 10 percent, sequentially. The company expects its opex/sales ratio to stabilize in Q1, while decreasing in 2H. 3D Systems has also announced that following the completion of its recent acquisitions in 1H, it will now focus on optimizing its margin structure.