Why 3D Systems’ stock just exploded 84.5% higher

What happened

3D printer manufacturer actions 3d systems (NYSE: DDD) just jumped 84.5% at 11:30 am EST – and yes, you read that right.

Early this morning, 3D announced the successful sale of its “non-core software business for approximately $ 64 million in cash proceeds.” It also added a snapshot of its fourth quarter 2020 financial results, forecasting that revenue will far exceed analysts’ expectations and range between $ 170 million and $ 176 million for the quarter.

So what

In the last report, of course, analysts told investors to expect less than $140 million dollars in 3D sales as of Q4, so what we’re looking at here is an almost certain profit pace of historic proportions – but even that wasn’t the end of the good news 3D had to report.

With its $ 64 million cash windfall, 3D says it has been able to repay all of its “senior secured term” debt, and no longer needs to keep selling shares, and diluting them. shareholders, thanks to its previously announced “at-the-”. market “stock selling program. (By the way – at this point, a tip of the hat suits analysts at investment bank Craig-Hallum, who predicted all from the above two months ago).

Now what

Essentially debt-free now and free to focus on its two core 3D printer manufacturing businesses (industry and healthcare), the company also noted that in addition to better-than-expected sales, it is expected to bring in $ 11 million to $ 19 million in pro forma profits for the fourth quarter. Generally Accepted Accounting Principles (GAAP) results could still be as bad as a loss of $ 8.6 million, but there is at least the possibility this 3D will generate a GAAP profit of $ 0.5 million this quarter.

After a second quarter of revenue growth of over 20%, and with GAAP profitability finally within reach, 3D Systems CEO Jeffrey Graves concluded this morning by saying, “With the benefits of our organizational alignment, our Technology and application leadership, and our relentless focus on operational execution, we are more optimistic than ever about the exciting future we see in 2021 and beyond. “

It seems that investors agree with this assessment.