Can New Saudi Partnerships Reshape 3D Systems (DDD)’ Localization Strategy in Advanced Manufacturing?

• 3D Systems announced that Saudi Electric Company has acquired a 30% stake in its joint venture NAMI, and NAMI secured a US$26 million, five-year agreement with Modern Isotope Factory to manufacture tungsten components for non-destructive testing devices.
• This partnership also sees Lockheed Martin collaborating with NAMI to localize and produce critical aerospace and defense parts in Saudi Arabia, highlighting the Kingdom's growing role in high-tech manufacturing and supply chains.
• Let's examine how the localization of advanced manufacturing in Saudi Arabia may impact 3D Systems' broader investment narrative.

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3D Systems Investment Narrative Recap

To see 3D Systems as an appealing investment, one must believe in the company’s ability to leverage global partnerships and tap into the trend toward localized, advanced manufacturing, especially in high-value sectors like aerospace and healthcare. The Saudi Electric Company’s investment in NAMI and the high-profile Lockheed Martin collaboration reinforce this potential, but the fundamental short-term catalyst remains a recovery in customer capital spending. The principal risk, ongoing delays in large-capex purchases, remains unchanged, as this news does not materially resolve demand uncertainty for 3D Systems’ core markets.

The recent US$26 million, five-year agreement with Modern Isotope Factory stands out, as it directly connects 3D Systems’ technology with growing demand in industrial inspection and energy, supporting the view that specialized contracts can bolster the company’s application-based expansion. While helpful for diversifying revenue streams, the deal’s impact may be gradual and does not guarantee swift normalization of the broader sales pipeline.

Yet, against these new international wins, investors still need to ask how 3D Systems can manage continued delays in large customer projects...

Read the full narrative on 3D Systems (it's free!)

3D Systems is expected to generate $359.5 million in revenue and $2.6 million in earnings by 2028. This scenario assumes revenues will decline at a rate of 4.5% per year, with earnings rising by $147.4 million from the current loss of $-144.8 million.

Uncover how 3D Systems' forecasts yield a $3.25 fair value, in line with its current price.

Exploring Other Perspectives

Community fair value estimates for 3D Systems span from US$2.36 to US$4, with three distinct investor viewpoints sourced from the Simply Wall St Community. While opinions vary, many contributors remain cautious about the challenge of converting delayed orders into a sustained growth trajectory.

Explore 3 other fair value estimates on 3D Systems - why the stock might be worth as much as 25% more than the current price!

Build Your Own 3D Systems Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your 3D Systems research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
• Our free 3D Systems research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate 3D Systems' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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