3D Systems Corp (TDSC) has been on fire in recent months. While valuations may be high, there will be gains to be had given the strong earnings momentum.
If you are looking for a short-term, high-growth play, this Zacks #1 Rank (Strong Buy) is a great candidate.
Company Description
3D Systems provides 3-D printing, prototyping and manufacturing services and parts.
Record-Setting Revenue
Since being featured back in April 2010, 3D Systems trended sideway before taking off thanks to the past 2 quarterly reports. The most recent came on Feb 17 and included revenue of $51.6 million, a 42% increase from the previous year.
Earnings more than doubled to $9.4 million, which is $0.35 per share after a 5-cent adjustment. Analysts were looking for $0.26, making this the third consecutive earnings surprise.
Estimates Spike
The company did not provide guidance, but analysts loved what they saw. Each estimate revision was to the upside, creating some excellent earnings momentum. Right now the Zacks Consensus Estimate for 2011 stands at $1.39, a 38-cent increase and projects a 79% growth rate.
Next year’s forecasts are averaging $1.87, which is 40 cents higher than a week ago and project at 35% growth rate.
On a Spending Spree
3D Systems has put its cash to good use as of late. On Feb 22 it acquired Quickparts, which generates $25 million in annual revenue, in an all cash deal. The company also bought National RP Support, in January. Both additions offer services and support for the company’s parts.
Estimates Momentum
I touched on the recent earnings moves, but the chart below shows a very bullish longer-term trend. You can see just have sharply the full-year Zacks Consensus Estimates have been rising. As long as that continues, you can expect TDSC to continue setting new highs.
Now, keep in mind that the valuations say it is a very pricey stock. So, I would jump out once those estimates take even the slightest turn lower. But for now, it is a great short-term play with a good amount of upside.
Read the April 6th Feature Here
Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Small Cap Trader service
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3D SYSTEMS CORP (TDSC): Free Stock Analysis Report
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