3D Systems Corporation (NYSE:DDD) has come under pressure, in recent weeks, after powering record highs of $55. The stock tripling in value came on the company providing preliminary fourth-quarter results that topped Wall Street estimates even on the company feeling the pandemic's full force.
Challenging Macro Environment
The 3D printing and digital manufacturing solutions company experienced a tough 2020 on the pandemic, hitting its core customer base in the industrial sector. However, after some steep declines for the better part of the year, businesses started picking up, heading into the yearend conversely resulting in renewed investor interest in the stock.
The stock finished the year 3% up as investors reacted to improving underlying fundamentals. Two months into the New Year and the stock is up by more than 300%, despite pulling lower from record highs. The upcoming results might as well be the catalysts to steer the stock higher after the recent pullback.
Preliminary results indicate the 3D printing company could post revenues of between $170 million and $176 million, representing a 25% sequential growth. Analysts, on the other hand, expect the company to post revenues of $168.5 million.
Expansion Drive
Headline numbers of cash flows is another development that should strengthen 3D Systems in the market. Cash flows topping estimates would mark an important milestone give that the challenges that the company experienced in the quarter. The company has already hinted it expects operating income of between $11 million and $19 million, more than double the $5.6 million reported a year earlier.
In addition, to solid earnings expectations, 3D Systems has also excited the market on announcing plans to expand its advanced manufacturing capabilities for both metal and polymer components. Similarly, the company is expanding its headquarters campus in South Carolina by 100,000 square feet.
With the expansion, 3D Systems is to consolidate materials manufacturing, quality, and logistics operations. It has also confirmed plans to add new and expanded materials development laboratories.