3D Systems' 'Undeniably Sensible' Story

3D Systems Corporation DDD believes the 3DP industry is on the verge of a transition point “connecting prototyping to manufacturing,” leading to real volume and profits.

Brean Capital’s Ananda Baruah maintains a Hold rating on the company.

How The Story Is Developing

Following the healthcare event hosted by 3D Systems, Baruah mentioned that the company’s healthcare business now accounts for 27 percent of the overall revenue, growing at 10–20 percent organically during calendar year 2015–16.

“We came away understanding 1) that the HC business itself could be in the process of growing into a legitimately material business on its own, and 2) more fully grasping DDD's strategy of leveraging the holistic platform capabilities of the HC vertical by applying it to the other target verticals of aerospace, automotive, and general industrial,” the analyst stated.

What Needs To Be Done

With the 3D printing industry poised to transition to manufacturing, Baruah believes 3D Systems is better positioned than the market estimates. The key now would be to develop end-to-end solutions and ecosystems across verticals.

The company believes its healthcare vertical is a robust example of “how to cultivate a vertical business, but also a great platform to apply to other key verticals it's looking to develop, such as Aerospace, Automotive, Defense, and general industrial,” the analyst went on to say.

However, in order to continue to drive revenue, 3D Systems acknowledged the need to continue to strengthen its sales mechanism, especially in Europe, and to continue to drive industry awareness by bringing on greater domain expertise.

Shares of 3D Systems closed Monday trading at $15.18.