Why 3D Systems Stock Crashed After Earnings

3D Systems (NYSE: DDD), the eponymous 3D printer stock, experienced a paper jam Thursday morning as shares tumbled 17.1% through 9:55 a.m. ET after reporting worse-than-expected Q4 2024 earnings.

Heading into the report last night, analysts forecast that the company would lose $0.11 per share on $115.2 million in sales. 3D Systems reported a loss nearly twice as big as expected -- $0.19 per share -- and its sales fell short at $111 million.

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Q4 earnings for 3D Systems

It was bad news all around at 3D Systems last night. Sales for the final quarter of 2024 slipped 3% year over year, and gross profit margin tumbled 730 basis points to 31%. On the bottom line, the company's loss, as calculated according to generally accepted accounting principles (GAAP), was $0.25 per share. (The $0.19 loss was a non-GAAP number).

For the full year, 3D Systems reported sales down 10% at $440.1 million, gross margins down 290 basis points at 37.3%, and $1.94 per share in GAAP losses.

On the plus side, the company's losses in 2023, both for the quarter and the year, were even larger. In this respect, at least, things did improve. Also noteworthy is that 3D Systems burned through $61 million in negative free cash flow (FCF) in 2024, an improvement from 2023's $107.9 million in negative FCF.

Is 3D Systems stock a sell?

Commenting on the quarter, company CEO Dr. Jeffrey Graves admitted that "2024 was a challenging year for sales, reflecting weak customer capex [capital expenditures] spending on new manufacturing plant capacity." Nevertheless, he insisted that his "core businesses still delivered within the full-year revenue range communicated in our prior forecast." He also noted an "uptick" in sales in Q4, as well as an improvement in consumables sales (i.e. "ink" for its printers), and said the company's "new products [are] now gaining traction in the market."

Despite this optimism, though, 3D Systems forecast sales of no more than $435 million in 2025, which is less than last year. With sales still sliding and losses continuing, it's little wonder that the company's stock is going down today.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends 3D Systems. The Motley Fool has a disclosure policy.