3D Systems (DDD) Stock Surges on Partnership with Daimler

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Jan 24, 2025
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3D Systems (DDD, Financial) experienced a robust 22.2% jump in its stock price as the company announced a strategic partnership with its AI manufacturing software subsidiary Oqton, Daimler Truck/Daimler Buses, and German software provider Wibu-Systems. This collaboration is set to revolutionize the manufacturing landscape by facilitating on-site additive manufacturing of replacement parts for Daimler Buses, potentially tapping into a lucrative 3D-printed auto parts market forecasted to reach $7.9 billion annually by 2027.

Under this "decentralized spare parts production" agreement, 3D Systems, now a certified printing partner of Daimler Buses, will focus on local production of spare parts like pins, covers, and inserts. This shift to local manufacturing is expected to cut down delivery times by up to 75%, significantly reducing vehicle downtime due to maintenance. The initiative will initially leverage the company's SLS 380 technology for printing plastic parts, with ambitions to expand into metal parts in the future.

Despite the promising partnership, the financial metrics for 3D Systems reveal some challenges. The stock is currently priced at $3.72, with a market capitalization of approximately $503.83 million. The company is grappling with severe warning signs such as an Altman Z-Score indicating financial distress, a declining gross margin, and low operational efficiency, as reflected in the declining Piotroski F-Score. Additionally, 3D Systems displays a negative return on equity (ROE) of -120.54%, highlighting operational inefficiencies.

In terms of valuation, 3D Systems is classified under a "Possibly Value Trap, Think Twice" category according to the GF Value. The GF Value for the company stands at $6.58, suggesting that the stock may be undervalued at its current price. However, investors should be cautious given the company's financial instability and the possibility of bankruptcy in the next two years.

On the positive side, 3D Systems has seen insider buying, with 60,000 shares purchased over the past three months, indicating potential confidence from executives in its strategic direction. The company remains a key player in the 3D printing sector, particularly with its comprehensive suite of digital manufacturing solutions that extend across healthcare and industrial segments.

Investors interested in 3D printing and the evolving technology landscape might find 3D Systems appealing due to its innovative partnership endeavors. However, it's recommended to weigh both the potential growth from new collaborations and the financial risks indicated by the company's recent metrics before making any investment decisions.

Disclosures

I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.