Intrinsic value of 3D Systems Corporation - DDD

Previous Close

$7.44

  Intrinsic Value

$0.63

stock screener

  Rating & Target

str. sell

-92%

Previous close

$7.44

 
Intrinsic value

$0.63

 
Up/down potential

-92%

 
Rating

str. sell

We calculate the intrinsic value of DDD stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  702
  718
  736
  757
  780
  805
  833
  862
  894
  929
  965
  1,005
  1,046
  1,091
  1,138
  1,187
  1,240
  1,296
  1,355
  1,417
  1,483
  1,552
  1,625
  1,702
  1,783
  1,869
  1,958
  2,053
  2,152
  2,257
Variable operating expenses, $m
  515
  526
  539
  554
  569
  587
  606
  626
  649
  672
  669
  696
  725
  756
  788
  823
  859
  898
  939
  982
  1,027
  1,075
  1,126
  1,179
  1,235
  1,295
  1,357
  1,422
  1,491
  1,564
Fixed operating expenses, $m
  235
  240
  246
  251
  256
  262
  268
  274
  280
  286
  292
  299
  305
  312
  319
  326
  333
  340
  348
  355
  363
  371
  379
  388
  396
  405
  414
  423
  432
  442
Total operating expenses, $m
  750
  766
  785
  805
  825
  849
  874
  900
  929
  958
  961
  995
  1,030
  1,068
  1,107
  1,149
  1,192
  1,238
  1,287
  1,337
  1,390
  1,446
  1,505
  1,567
  1,631
  1,700
  1,771
  1,845
  1,923
  2,006
Operating income, $m
  -49
  -49
  -48
  -47
  -46
  -44
  -41
  -38
  -34
  -30
  4
  10
  16
  23
  31
  39
  48
  58
  68
  80
  92
  106
  120
  135
  151
  169
  188
  208
  229
  251
EBITDA, $m
  18
  19
  20
  22
  25
  28
  32
  37
  43
  49
  56
  64
  72
  81
  91
  102
  114
  127
  141
  156
  171
  188
  207
  226
  247
  269
  292
  317
  344
  372
Interest expense (income), $m
  1
  2
  2
  2
  3
  3
  4
  4
  5
  5
  6
  6
  7
  8
  9
  10
  10
  11
  12
  14
  15
  16
  17
  19
  20
  21
  23
  25
  26
  28
  30
Earnings before tax, $m
  -50
  -51
  -51
  -50
  -49
  -47
  -45
  -42
  -39
  -35
  -2
  3
  8
  14
  21
  28
  37
  45
  55
  65
  76
  88
  101
  115
  130
  146
  163
  181
  200
  221
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  2
  4
  6
  8
  10
  12
  15
  18
  21
  24
  27
  31
  35
  39
  44
  49
  54
  60
Net income, $m
  -50
  -51
  -51
  -50
  -49
  -47
  -45
  -42
  -39
  -35
  -2
  2
  6
  10
  15
  21
  27
  33
  40
  48
  56
  64
  74
  84
  95
  106
  119
  132
  146
  161

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  842
  862
  884
  909
  936
  967
  1,000
  1,035
  1,074
  1,115
  1,159
  1,206
  1,256
  1,309
  1,366
  1,426
  1,489
  1,556
  1,627
  1,701
  1,780
  1,863
  1,951
  2,043
  2,141
  2,243
  2,351
  2,464
  2,584
  2,709
Adjusted assets (=assets-cash), $m
  842
  862
  884
  909
  936
  967
  1,000
  1,035
  1,074
  1,115
  1,159
  1,206
  1,256
  1,309
  1,366
  1,426
  1,489
  1,556
  1,627
  1,701
  1,780
  1,863
  1,951
  2,043
  2,141
  2,243
  2,351
  2,464
  2,584
  2,709
Revenue / Adjusted assets
  0.834
  0.833
  0.833
  0.833
  0.833
  0.832
  0.833
  0.833
  0.832
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.832
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
Average production assets, $m
  262
  268
  275
  283
  292
  301
  311
  323
  334
  347
  361
  376
  391
  408
  425
  444
  464
  485
  507
  530
  555
  581
  608
  637
  667
  699
  732
  768
  805
  844
Working capital, $m
  126
  129
  133
  136
  140
  145
  150
  155
  161
  167
  174
  181
  188
  196
  205
  214
  223
  233
  244
  255
  267
  279
  293
  306
  321
  336
  353
  370
  387
  406
Total debt, $m
  37
  43
  50
  57
  66
  75
  84
  95
  107
  119
  132
  146
  161
  177
  194
  212
  231
  251
  273
  295
  319
  344
  370
  398
  427
  458
  490
  524
  560
  597
Total liabilities, $m
  253
  259
  265
  273
  281
  290
  300
  311
  322
  334
  348
  362
  377
  393
  410
  428
  447
  467
  488
  510
  534
  559
  585
  613
  642
  673
  705
  739
  775
  813
Total equity, $m
  590
  603
  619
  636
  655
  677
  700
  725
  751
  780
  811
  844
  879
  916
  956
  998
  1,042
  1,089
  1,139
  1,191
  1,246
  1,304
  1,366
  1,430
  1,499
  1,570
  1,646
  1,725
  1,809
  1,896
Total liabilities and equity, $m
  843
  862
  884
  909
  936
  967
  1,000
  1,036
  1,073
  1,114
  1,159
  1,206
  1,256
  1,309
  1,366
  1,426
  1,489
  1,556
  1,627
  1,701
  1,780
  1,863
  1,951
  2,043
  2,141
  2,243
  2,351
  2,464
  2,584
  2,709
Debt-to-equity ratio
  0.060
  0.070
  0.080
  0.090
  0.100
  0.110
  0.120
  0.130
  0.140
  0.150
  0.160
  0.170
  0.180
  0.190
  0.200
  0.210
  0.220
  0.230
  0.240
  0.250
  0.260
  0.260
  0.270
  0.280
  0.280
  0.290
  0.300
  0.300
  0.310
  0.310
Adjusted equity ratio
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -50
  -51
  -51
  -50
  -49
  -47
  -45
  -42
  -39
  -35
  -2
  2
  6
  10
  15
  21
  27
  33
  40
  48
  56
  64
  74
  84
  95
  106
  119
  132
  146
  161
Depreciation, amort., depletion, $m
  66
  67
  68
  69
  71
  72
  73
  75
  77
  79
  52
  54
  56
  58
  61
  63
  66
  69
  72
  76
  79
  83
  87
  91
  95
  100
  105
  110
  115
  121
Funds from operations, $m
  16
  17
  18
  19
  22
  25
  28
  33
  38
  43
  49
  56
  62
  69
  76
  84
  93
  102
  112
  123
  135
  147
  161
  175
  190
  206
  224
  242
  261
  282
Change in working capital, $m
  2
  3
  3
  4
  4
  5
  5
  5
  6
  6
  7
  7
  8
  8
  8
  9
  9
  10
  11
  11
  12
  12
  13
  14
  15
  15
  16
  17
  18
  19
Cash from operations, $m
  14
  14
  14
  16
  18
  20
  23
  27
  32
  37
  43
  49
  54
  61
  68
  75
  83
  92
  102
  112
  123
  135
  148
  161
  176
  191
  207
  225
  243
  263
Maintenance CAPEX, $m
  -37
  -37
  -38
  -39
  -40
  -42
  -43
  -44
  -46
  -48
  -50
  -52
  -54
  -56
  -58
  -61
  -63
  -66
  -69
  -72
  -76
  -79
  -83
  -87
  -91
  -95
  -100
  -105
  -110
  -115
New CAPEX, $m
  -5
  -6
  -7
  -8
  -9
  -9
  -10
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -25
  -26
  -27
  -29
  -30
  -32
  -34
  -35
  -37
  -39
Cash from investing activities, $m
  -42
  -43
  -45
  -47
  -49
  -51
  -53
  -55
  -58
  -61
  -64
  -67
  -70
  -73
  -76
  -80
  -83
  -87
  -91
  -95
  -101
  -105
  -110
  -116
  -121
  -127
  -134
  -140
  -147
  -154
Free cash flow, $m
  -28
  -30
  -31
  -31
  -31
  -31
  -30
  -28
  -26
  -24
  -21
  -18
  -15
  -12
  -8
  -4
  0
  5
  11
  16
  23
  30
  37
  46
  54
  64
  74
  85
  97
  109
Issuance/(repayment) of debt, $m
  5
  6
  7
  7
  8
  9
  10
  11
  12
  12
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  24
  25
  26
  28
  29
  31
  32
  34
  36
  38
Issuance/(repurchase) of shares, $m
  62
  64
  66
  67
  68
  68
  68
  67
  66
  64
  33
  31
  29
  27
  24
  21
  18
  14
  10
  5
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  67
  70
  73
  74
  76
  77
  78
  78
  78
  76
  46
  45
  44
  43
  41
  39
  37
  34
  31
  27
  24
  25
  26
  28
  29
  31
  32
  34
  36
  38
Total cash flow (excl. dividends), $m
  39
  40
  42
  43
  45
  47
  48
  50
  51
  53
  26
  27
  29
  31
  33
  35
  37
  39
  41
  44
  46
  55
  64
  73
  83
  95
  106
  119
  132
  147
Retained Cash Flow (-), $m
  -62
  -64
  -66
  -67
  -68
  -68
  -68
  -67
  -66
  -64
  -33
  -33
  -35
  -37
  -40
  -42
  -44
  -47
  -50
  -52
  -55
  -58
  -61
  -65
  -68
  -72
  -75
  -79
  -84
  -88
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -23
  -24
  -24
  -24
  -23
  -22
  -20
  -18
  -15
  -11
  -7
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -3
  2
  9
  15
  23
  31
  39
  49
  59
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  -22
  -22
  -21
  -20
  -18
  -16
  -13
  -11
  -8
  -6
  -3
  -2
  -2
  -2
  -2
  -2
  -2
  -1
  -1
  -1
  -1
  0
  0
  0
  1
  1
  1
  1
  1
  0
Current shareholders' claim on cash, %
  93.3
  86.8
  80.8
  75.3
  70.2
  65.5
  61.3
  57.6
  54.2
  51.3
  49.8
  48.6
  47.5
  46.5
  45.7
  45.0
  44.5
  44.1
  43.8
  43.7
  43.7
  43.7
  43.7
  43.7
  43.7
  43.7
  43.7
  43.7
  43.7
  43.7

3D Systems Corporation is a holding company. The Company provides three-dimensional (3D) printing solutions, including 3D printers, print materials, software, on demand manufacturing services and digital design tools. Its precision healthcare capabilities include simulation, Virtual Surgical Planning (VSP), and printing of medical and dental devices and surgical guides and instruments. Its solutions support applications in a range of industries, including healthcare, aerospace, automotive and durable goods. The Company offers a range of 3D printers, print materials, software, haptic devices, scanners and virtual surgical simulators. The Company offers a range of 3D printing technologies, including Stereolithography (SLA), Selective Laser Sintering (SLS), Direct Metal Printing (DMP), MultiJet Printing (MJP) and ColorJet Printing (CJP). The Company also offers 3D virtual reality simulators and simulator modules for medical applications.

FINANCIAL RATIOS  of  3D Systems Corporation (DDD)

Valuation Ratios
P/E Ratio -22.2
Price to Sales 1.3
Price to Book 1.3
Price to Tangible Book
Price to Cash Flow 14.8
Price to Free Cash Flow 21.7
Growth Rates
Sales Growth Rate -5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -21.7%
Cap. Spend. - 3 Yr. Gr. Rate 14.9%
Financial Strength
Quick Ratio 185
Current Ratio 0
LT Debt to Equity 1.1%
Total Debt to Equity 1.3%
Interest Coverage -39
Management Effectiveness
Return On Assets -4.3%
Ret/ On Assets - 3 Yr. Avg. -19.1%
Return On Total Capital -5.8%
Ret/ On T. Cap. - 3 Yr. Avg. -23.8%
Return On Equity -5.9%
Return On Equity - 3 Yr. Avg. -24%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 49%
Gross Margin - 3 Yr. Avg. 47.1%
EBITDA Margin 3.5%
EBITDA Margin - 3 Yr. Avg. -23.7%
Operating Margin -6%
Oper. Margin - 3 Yr. Avg. -32.8%
Pre-Tax Margin -6.3%
Pre-Tax Margin - 3 Yr. Avg. -34%
Net Profit Margin -6%
Net Profit Margin - 3 Yr. Avg. -34.2%
Effective Tax Rate 2.5%
Eff/ Tax Rate - 3 Yr. Avg. 10.2%
Payout Ratio 0%

DDD stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DDD stock intrinsic value calculation we used $688 million for the last fiscal year's total revenue generated by 3D Systems Corporation. The default revenue input number comes from 0001 income statement of 3D Systems Corporation. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our DDD stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for DDD is calculated based on our internal credit rating of 3D Systems Corporation, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of 3D Systems Corporation.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of DDD stock the variable cost ratio is equal to 73.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $230 million in the base year in the intrinsic value calculation for DDD stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for 3D Systems Corporation.

Corporate tax rate of 27% is the nominal tax rate for 3D Systems Corporation. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the DDD stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for DDD are equal to 37.4%.

Life of production assets of 7 years is the average useful life of capital assets used in 3D Systems Corporation operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for DDD is equal to 18%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $578.369 million for 3D Systems Corporation - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 114.667 million for 3D Systems Corporation is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of 3D Systems Corporation at the current share price and the inputted number of shares is $0.9 billion.

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