On Aug 19, Zacks Investment Research upgraded
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
The 3D printing solutions provider was primarily upgraded on the
back of positive estimate revisions for fiscal 2014. The company's
strong second-quarter results and favorable fiscal 2014 guidance
Stratasys reported better-than-expected second-quarter 2014
results on Aug 10. Reported earnings and revenues compared
favorably on a year-over-year basis. The company witnessed
improvement in the revenues of both Products and Services segments
due to robust demand for its higher-margin products and
Higher demand for its MakerBot products and increased sales of
higher-end Fortus and Connex systems boosted the top line. The
company also reported strong demand for entry-level Mojo and uPrint
Buoyed by the higher adoption of its 3D technology and printers,
Stratasys raised its 2014 guidance as well. The company also
updated its long-term operational targets, which includes a 25%
organic revenue growth (previous forecast 20% growth).
Moreover, Stratasys has witnessed positive estimate revisions
for fiscal 2014 over the last 30 days. During the period, 4 out of
the total 6 estimates were revised up and as a result the earnings
estimate increased from $1.75 to $1.87 per share.
Notably, Stratasys' shares gained about 25.8% over the last 3
months. Other 3D printing solution providers such as Voxeljet (
) added 16.9%, ExOne (
) gained 6.9% while 3D Systems (
) declined approximately 1.1% during the same time frame.
We believe 3D printing market presents a favorable long-term
investment opportunity as a large number of engineers, designers,
architects and entrepreneurs are resorting to 3D solutions for
their primary designing and product modeling.
Moreover, favorable forecasts by market research firms such as
Gartner, IDC and Canalys have renewed investors' interest in the
emerging 3D technology stocks. Per Gartner, worldwide shipments of
3D printers will increase 75% to 98,065 units in 2014 and almost
double in 2015. IDC predicted that the 3D printer market will
witness a compound annual growth rate of 29% from 2012-2017.
Canalys expects the global 3D printing market to soar from $2.5
billion in 2013 to $16.2 billion in 2018.
We, therefore, believe that the adoption rate and cost control
measures will be important factors determining the fortune of the
players in this segment.
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