3D Systems Surprises with Q2 Profit, Stock Soars 29.5%

3D Systems stock surged 29.5% after reporting a mixed bag of earnings, beating on earnings but missing on sales. The 3D printing company reported a surprise GAAP profit and promised positive cash flow next year. Despite still losing money, 3D is making improvements, which may eventually make the stock a "buy" again. The Motley Fool Stock Advisor analyst team identified 10 stocks they believe are better buys, including Netflix and Nvidia.

3D Systems (NYSE: DDD) saw its stock surge 29.5% in extended trading following the release of its second-quarter earnings report. The 3D printing company reported a narrower adjusted loss than expected and promised positive cash flow in 2026, despite still operating at a loss. This mixed bag of earnings has investors considering the potential for future gains.

The company reported an adjusted loss of $0.07 per share, beating the consensus estimate of $0.16 per share [1]. Revenue came in at $94.8 million, in line with the $95.72 million forecast. While the top line fell 16% from a year earlier, reflecting lower customer capital spending and the sale of the Geomagic software business, sales improved sequentially. Growth was driven by double-digit gains in the medical technology and aerospace and defense markets, offsetting weakness in consumer-facing industrial demand and a drop in dental segment sales.

Chief Executive Jeffrey Graves highlighted cost-cutting initiatives, including facility consolidation and workforce restructuring, which delivered more than $20 million in quarterly operating expense savings. This, combined with tariff-related costs of about $1 million offset by manufacturing efficiencies, kept the company on track to return to positive cash flow in 2026.

The company also reported a milestone in its regenerative medicine partnership with United Therapeutics (UTHR), earning a $2 million award during the quarter. Additionally, the recent balance sheet restructuring (combining debt retirement, refinancing, and share repurchases) will support ongoing growth and efficiency investments.

Despite the positive outlook, investors should remain cautious. The company has underperformed the market so far this year, losing about 45.7% compared to the S&P 500's gain of 8.6%. While the earnings surprise of +46.15% was a positive development, the company has a history of missing revenue estimates and has surpassed consensus EPS estimates just once over the last four quarters [2].

Looking ahead, the sustainability of the stock's immediate price movement will depend on management's commentary on the earnings call and future earnings expectations. The current consensus EPS estimate for the coming quarter is -$0.11 on $98.89 million in revenues, and for the current fiscal year, it is -$0.55 on $393.19 million in revenues [2].

Investors should also consider the industry outlook. The Zacks Industry Rank for Commercial Printing is currently in the top 26% of the 250 plus Zacks industries, indicating potential upside opportunities [2].

References:
[1] https://seekingalpha.com/news/4483526-3d-systems-shares-rise-after-smaller-than-expected-loss
[2] https://www.nasdaq.com/articles/3d-systems-ddd-reports-q2-loss-misses-revenue-estimates