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3D Systems stock rises by over 90% after strong initial Q4 2020 financial results 

3D printer manufacturer 3D Systems has seen the value of its stock jump by 94% after performing better than anticipated in its preliminary Q4 2020 financials. 

During the final quarter of last year, the firm expects to have generated a revenue of $170 million to $176 million, which is 25% more than its initial estimates of $140 million. The company also revealed that it has completed the sale of its Cimatron and GibbsCAM divisions, allowing it to pay-off $21 million worth of outstanding debt. 

3D Systems’ positive forecast was received well by investors, and the value of the company’s shares rose from just $13.62 to $21.85 by mid-way through Thursday. The figures also represent a validation of the firm’s two-year restructuring plan, which has seen it make significant cost reductions and focus more on its core verticals.  

“In the summer of 2020, we laid out a four-stage plan to deliver increased value to our customers and shareholders,” said Dr. Jeffrey Graves, CEO of 3D Systems. “We are pleased to now see significant progress from these efforts, as reflected in accelerated top-line growth and rapidly strengthening operating margins.”

“With the benefits of our organizational alignment, we are more optimistic than ever about the exciting future we see ahead in 2021 and beyond.”

According to 3D Systems' provisional Q4 figures, it expects to have exceeded revenue projections by around 25%. Photo via 3D Systems.
According to 3D Systems’ provisional Q4 figures, it expects to exceed is initial revenue projections by around 25%. Photo via 3D Systems.

3D Systems’ return to profitability 

Although 3D Systems hasn’t completed its FY 2020 accounting process, initial figures suggest that it began to recover towards the end of a difficult 2020. In Q4 2020, the company exceeded revenue expectations, posting an operating income of $11million to $19million, with 20% sequential growth within its core segments. 

Finalizing the sale of two of its subsidiaries also raised $64.2 million for the firm, including the $8.9 million worth of cash that was transferred to the buyer as part of the deal. Using a portion of its recouped funds, 3D Systems paid-off the last of its outstanding debt, although it has opted to retain access to its loan facility. 

Additionally, due to its optimistic Q4 revenue outlook, the company has terminated its market equity program early, and no shares of common stock were sold during the quarter. 3D Systems won’t be releasing its full results until February 24th 2021, but according to Graves, the firm has already demonstrated its growth potential. 

“Our Team’s ability to deliver over 20% consecutive-quarter revenue growth in both business units, while executing large scale restructuring, was particularly gratifying to see,” said Graves. “Having surpassed our prior year, pre-COVID revenue performance in Q4, we are excited about the trajectory we are on as we enter the new year.”

3D printing’s day of share price increases (07/01/21)
Company  Opening Share Price   Current Share Price  Movement 
3D Systems  $13.62 $21.85 +94%
Stratasys  $22.50 $27.32 +30%
ExOne $10.81  $13.10 +28%
voxeljet $10.53 $13.06 +29%

Recovering from a turbulent 2020

3D Systems’ leadership team will likely feel relieved about its provisional results, as the company has suffered three successive quarterly revenue declines in 2020. By Q2, Graves was installed as the firm’s new CEO, and he wasted no time in reforming the company to focus on its key verticals, and attempt to return to profitability. 

As part of the restructuring, 3D Systems cut its workforce by 20%, and made $150 million worth of shares available in a now-defunct equity-raising scheme. However, the company reported a “rebound in customer activity” in Q3 2020, as firms began to re-open after the global lockdown, and this appears to have continued into Q4. 

While it remains to be seen whether the pandemic will allow this trend to carry on, for the time being, many other 3D printing companies are also trading well on the exchange. Stratasys for instance underwent a ‘strategic resizing’ in 2020 that saw it achieve sequential revenue growth in Q3, and today alone, its stock rose by 30%. 

Metal 3D printing companies have also seen their values rise significantly since Desktop Metal went public in December 2020. In particular, the shares of rival firms ExOne and voxeljet have benefited, and today they each saw increases of 28% and 29%, demonstrating the continued interest generated by Desktop’s merger. 

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Featured image shows a line of ProX SLS 6100 machines. Photo via 3D Systems.

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