3D Systems Corporation (DDD): A Bear Case Theory

We came across a bearish thesis on 3D Systems Corporation (DDD) on Substack by Industrial Tech Stock Analyst. In this article, we will summarize the bears’ thesis on DDD. 3D Systems Corporation (DDD)’s share was trading at $1.94 as of April 24^th.

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3D Systems (DDD) is facing mounting challenges in 2025, as its latest earnings report and muted guidance underscore ongoing operational headwinds and competitive pressures. The company reported Q4 2024 revenue of $111 million, missing expectations due to a $9 million reduction tied to a change in revenue recognition within its Regenerative Medicine program. While this accounting adjustment does not reflect lost business, it contributed to a steep 21% decline in Healthcare Solutions revenue, offset only partially by an 11% rise in Industrial Solutions. Gross margins continued to deteriorate, falling to 31.3% from 39.8% a year earlier, and adjusted EBITDA posted a $19 million loss. The 2025 outlook is equally underwhelming, with management guiding revenue of $420–435 million—roughly a 2% decline at the midpoint and below consensus estimates. Even when adjusting for the divested Geomagic business, growth appears flat to modest, reinforcing expectations of a tough year ahead.

While the $50 million cost-reduction plan and a target of breakeven adjusted EBITDA by Q4 2025 offer a path to financial improvement, investor skepticism remains high. Gross margins have declined for three straight quarters, now at five-year lows, suggesting margin pressure from rising competition in both industrial and prototyping markets. Rivals like Formlabs and Bambu Lab are gaining traction with more affordable solutions, chipping away at 3D Systems’ pricing power. Furthermore, Regenerative Medicine, although potentially transformative, is years away from being accretive and continues to be a financial drag. Dental remains a critical market, supported by a $250 million, five-year deal with Align Technology, but competitive dynamics and Align’s move toward direct printing may erode long-term reliance on 3D Systems. Given management’s track record of missing forward guidance and structural concerns, investors may find better risk-reward profiles elsewhere in the additive manufacturing sector.

3D Systems Corporation (DDD) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held DDD at the end of the fourth quarter which was 21 in the previous quarter. While we acknowledge the risk and potential of DDD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DDD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.