3D Systems' A&D Business Benefits From US Policy, Rising Investment

3D Systems’ DDD Aerospace & Defense (A&D) business, which grew more than 15% year over year in 2025, is expected to grow more than 20% in 2026, thanks to ongoing investments and favorable U.S. policy tailwinds. Revenues from production printing systems and custom metal parts, which are core businesses, are expected to exceed $35 million in 2026. The restrictions imposed on foreign-sourced 3D printing systems for Department of Defense programs under the National Defense Authorization Act for fiscal 2026 have created a favorable environment for domestic manufacturers like DDD.

The A&D business, which has been growing at a steady double-digit rate over the past several years, is expected to become DDD’s largest and fastest-growing industrial business in 2026. Strong demand across crewed/uncrewed aircraft, naval platforms, defense systems, rocket propulsion and satellite systems is a key catalyst. 3D Systems' capacity expansion plan, adding 80,000 square feet to its Littleton, CO, facility, is expected to further drive growth. The Littleton facility has been selected for certification under the America Makes JAQS-SQ framework. 

3D Systems remains on track in its multi-phase, $18.5 million U.S. Air Force-sponsored program to develop next-generation laser powder-bed fusion technologies for large-format, high-efficiency metal part production. These technologies are essential for the application of metal 3D printing to an expanding range of U.S. defense systems.

Upon completion in 2027, DDD will be the only U.S. provider of a complete, end-to-end metal additive manufacturing ecosystem that is entirely onshore for large-frame metal printing systems (more than 1 meter print area). 3D Systems' manufacturing footprint will cover system design (San Diego, CA), next-generation printer manufacturing (Rock Hill, SC) and certified metal parts production with advanced application development (Littleton, CO).

Internationally, 3D Systems’ A&D business is expected to benefit from aerospace-focused design and application expertise in Leuven, Belgium (AS9100-certified) and metal printer production in Riom, France. These facilities support customers across Europe, Korea, Japan and other international markets. DDD’s NAMI joint venture in Saudi Arabia is also noteworthy in this regard.

3D Systems’ Shares Underperform Industry & Sector

DDD shares have dropped 33.1% in a year, underperforming the Zacks Commercial Printing industry’s decline of 31.8% and the broader Zacks Industrial Products sector’s appreciation of 9.2%. The company’s underperformance can be attributed to a challenging macroeconomic environment, including uncertainty around tariffs, which has resulted in cautious customer capex spending. However, stringent cost control is expected to help 3D Systems lower losses. The company expects to save $50 million in annualized savings by the year-end.

3D Systems expects fourth-quarter 2025 revenues to increase 8-10% sequentially. Strong new printer systems sales, increased materials consumption and an anticipated rise in customer capital expenditure are expected to drive this top-line growth. Personalized health services are expected to deliver strong growth in the fourth quarter of 2025 and post double-digit growth for 2025. The Zacks Consensus Estimate for fourth-quarter 2025 net sales is pegged at $98.5 million, indicating year-over-year decrease of 11.3%. The consensus mark for the fourth-quarter 2025 loss is pegged at 10 cents per share, unchanged over the past 30 days. DDD reported a loss of 19 cents per share in the year-ago quarter.

The Zacks Consensus Estimate for 2025 net sales is pegged at $379.2 million, suggesting a 13.9% decline from 2024’s reported figure. The consensus mark for 2025 loss is pegged at 47 cents per share, unchanged over the past 30 days. DDD reported a loss of 62 cents per share in 2024.

Zacks Rank & Stocks to Consider

3D Systems currently has a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader Zacks Industrial Products sector are Alcoa AA, Core & Main CNM and OI Glass OI, each of which currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rates for Alcoa, Core & Main and OI Glass are currently pegged at 55.4%, 10.4% and 40.6%, respectively. Shares of Alcoa, Core & Main and OI Glass have appreciated 71.5%, 7.5% and 28.5%, respectively, over the past three months.

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This article originally published on Zacks Investment Research (zacks.com).

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