3D Systems Rated Hold as Ongoing Profitability Challenges Offset Healthcare Strength and Fair Valuation

William Blair analyst Brian Drab has maintained their neutral stance on DDD stock, giving a Hold rating on May 13.

Brian Drab has given his Hold rating due to a combination of factors tied to 3D Systems’ mixed fundamental profile. The company modestly exceeded first-quarter expectations, with slightly higher revenue and a return to positive adjusted EBITDA, driven largely by robust healthcare demand, particularly in dental and medical applications. However, despite pockets of strength and early success with platforms like NextDent and metal printing in A&D, the overall growth trajectory has lacked consistency, and the business remains unprofitable on an adjusted basis.

Drab also notes that while management’s cost-cutting initiatives are largely complete and operating expenses should now be stable, the company is still only targeting breakeven adjusted EBITDA for the full year. Organic revenue has declined for several consecutive years, and gross margins have compressed meaningfully, underscoring persistent profitability challenges. Given these headwinds, and with shares appearing fairly valued and near-term upside heavily reliant on a stronger industrial recovery, he believes a Hold rating is appropriate at this stage.

In another report released on May 13, Craig-Hallum also maintained a Hold rating on the stock with a $3.00 price target.