DDD Sags on Insider Sale; Gabelli Heartened by CFO Chat

Shares of 3D printing pioneers 3D Systems (DDD) are under pressure today, dropping $1.61, or over 5%, t o $29.05. Briefing.com notes that Securities & Exchange Commission filings last night by the company revealed a large insider sale, a dumping of 500,000 shares by CTO Charles Hull, at prices of $32.34 to $33.04.

Among the observations from the Street today, there was at least one positive note on the stock. Gabelli & Co.‘s Hendi Susanto reiterated a Hold rating, while writing that a recent visit to the company’s headquarters in Rock Hill, South Carolina left him “incrementally more positive” on the stock.

Susanto met withchief financial officer Damon Gregoire and the head of 3D’s IR,Stacey Witten, and he sums the major takeaways from that encounter:

Printers will be the largest revenue growth driver; specifically professional printers (ASP $20,000-250,000 and highest gross margins in printers). Acquisitions of software products carry high gross margin, estimated at around 80%, and simultaneously higher R&D expenses. Cube 3D printers carry corporate average gross margin. Management foresees consumer printer pricing will evolve toward lower price points of $1,000 and eventually $500, althrough cost reductions of components while focusing on maintaining gross margins (unlike a razor and blades business model where the razor is sold at a minimal profit, breakeven, or lossCFO sees no meaningful direct competition among 3D printing leaders as each offers unique set of competitive differentiations; 3D Systems still expressed interests in acquisitions to expand its 3D printing� content to print platform; Management sets a long-term goal of 75-80% recurring revenue stream profile (materials and services); 3D Systems characterize its seasonality of quarterly revenue growth progression like a hockey stick: sequential growth through the third quarter, the strongest performance in the fourth quarter, and sequential decline into the first quarter of the next year. Currently, 3D Systems is� anticipating a sequential decline into the first quarter of 2013 that is less pronounced compared to its historical figures [...] Excluding acquisitions of RapidForm and Geomagic, the mid-point of 2013 revenue guidance of $440-485 million implies organic revenue growth of ~22%.