Additive Manufacturing And Personalized Healthcare Will Drive Secular Change

Key Takeaways

• Breakthroughs in bioprinting and dental technologies could enable leadership in organ and denture markets, supporting substantial, sustainable margin expansion.
  
• Unique value chain integration and material innovation position the company for diverse, recurring revenue streams as digital manufacturing and new verticals accelerate.
  
• Rising competition, regulatory pressures, and evolving manufacturing technologies threaten profitability, revenue growth, and market relevance despite restructuring efforts and cost reductions.

Catalysts

Provides 3D printing and digital manufacturing solutions in North and South America, Europe, the Middle East, Africa, the Asia Pacific, and Oceania.

• Analyst consensus expects the United Therapeutics 3D-printed lung project to eventually generate regenerative medicine revenue, but the actual impact could be far larger; as technical and commercial breakthroughs accelerate, 3D Systems is positioned to pioneer organ bioprinting, catalyzing step-change, multi-billion dollar revenue growth and sector-leading margins.
  
• While analyst consensus sees the new dental launches as a driver of steady revenue, current adoption trends, outstanding product-market fit, and rapid regulatory progress suggest 3D Systems could become the clear market leader in digital dentures globally, supporting exponential consumable sales and sustainable high gross margins far exceeding current forecasts.
  
• The company's process, parts, and printers model uniquely capitalizes on the global shift to digital, localized, and sustainable manufacturing-meaning 3D Systems can capture entire value chains as Industry 4.0 adoption accelerates, resulting in diverse, recurring revenue streams from new and existing industrial and healthcare clients.
  
• 3D Systems' established dominance in patient-specific healthcare, supported by a deep ecosystem of proprietary, FDA-cleared materials and devices, positions the company to benefit disproportionately from the rise in personalized medicine, accelerating high-margin, recurring revenue and driving durable net margin expansion.
  
• As materials science advances and new vertical applications (such as AI infrastructure cooling, aerospace, oil and gas) emerge, 3D Systems' ongoing R&D investments and global application engineering teams are poised to unlock new billion-dollar markets, supporting long-term compound growth in revenues and earnings power.

3D Systems Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on 3D Systems compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming 3D Systems's revenue will decrease by 2.9% annually over the next 3 years.
• Even the bullish analysts are not forecasting that 3D Systems will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate 3D Systems's profit margin will increase from -35.0% to the average US Machinery industry of 9.7% in 3 years.
• If 3D Systems's profit margin were to converge on the industry average, you could expect earnings to reach $36.6 million (and earnings per share of $0.32) by about August 2028, up from $-144.8 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 16.3x on those 2028 earnings, up from -1.8x today. This future PE is lower than the current PE for the US Machinery industry at 23.9x.
• Analysts expect the number of shares outstanding to decline by 3.98% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 9.81%, as per the Simply Wall St company report.

3D Systems Future Earnings Per Share Growth

Risks

• The rapid commoditization of 3D printing hardware and the growing presence of lower-cost global competitors could erode 3D Systems' pricing power, resulting in sustained margin pressure and constraining any long-term rebound in net margins and overall profitability.
  
• Global economic uncertainty, ongoing tariff volatility, and increasing trade barriers are already delaying customer CapEx spending and may prolong weak demand for 3D Systems' industrial printers, hindering the company's ability to reverse its 16 percent year-over-year revenue decline and impacting future revenue growth.
  
• Environmental regulations and mounting sustainability requirements, especially regarding plastics-based 3D printing, could drive higher compliance and operational costs while potentially reducing demand for key segments, negatively affecting gross margin and earnings over time.
  
• Even as the company pursues restructuring and cost reduction, ongoing legal disputes, operational complexity from global footprint consolidation, and the challenge of exiting facilities could lead to volatility in operating expenses and unexpected one-time charges, undermining stability in earnings and projections for positive cash flow in 2026.
  
• Secular trends toward manufacturing automation, AI-enabled processes, and alternative production technologies such as improved CNC machining risk reducing the long-term addressable market for traditional 3D printing, risking future revenue growth and limiting 3D Systems' prospects in both core and emerging verticals.

Valuation

• The assumed bullish price target for 3D Systems is $4.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of 3D Systems's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $4.0, and the most bearish reporting a price target of just $2.5.
  
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $378.6 million, earnings will come to $36.6 million, and it would be trading on a PE ratio of 16.3x, assuming you use a discount rate of 9.8%.
  
• Given the current share price of $2.05, the bullish analyst price target of $4.0 is 48.8% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.