On Tuesday, Jan 14, shares of 3D printing solutions provider
) dropped 8.18% post the company's announcement of fiscal 2014
guidance. The company expects its operating expenses to increase
significantly during fiscal 2014 due to the incremental
investments in sales & marketing and research &
Moreover, Stratasys expects second half of fiscal 2014
non-GAAP net income to be governed by the rate of adoption of its
new products and changing schedules of operating expenses. The
company expects its non-GAAP net income in the range of $113
million-$119 million, or $2.15 to $2.25 per share for fiscal
Additionally, Stratasys expects to spend $50 million to $70
million to aid growth and expansionary initiatives to increase
its manufacturing capacity.
Regarding the top-line forecast, Stratasys expects fiscal 2014
revenues to range between $660 million-$680 million, higher than
the fiscal 2013 revenue forecast of $470 million to $490 million.
Additionally, the company expects strong organic revenues.
Management also expects synergies from the MakerBot and Objet
acquisitions to continue and result in incremental sales, going
It is worth noting that Stratasys' third-quarter results were
encouraging as the company reported better-than-expected sales on
the back of solid performances from its Product and Services
Increasing operating expenses due to regular product launches
and global expansion has been an issue as the company operates in
a high-cost business. Moreover, competition from big and small
3D Systems Corp
) adds to the company's concerns.
Nonetheless, the company's focus on the 3D printing market
presents a favorable long-term opportunity as a large number of
engineers, designers, architects and entrepreneurs are resorting
to 3D solutions for their primary designing. Moreover, Stratasys
has a huge installed base of 3D printing systems. Therefore, the
company should be able to sell related consumables.
If this can be developed into a revenue stream, it would lend
stability to its revenue model (since these revenues would be of
a recurring nature). We believe Stratasys will remain a valuable
company in the long term as the increase in customer usage,
growth in the installed base and the company's initiatives to
offer new applications for end users aid revenues.
Currently, Stratasys has a Zacks Rank #3 (Hold). Investors can
also consider better-ranked stocks such as
). Both the stocks carry a Zacks Rank #1 (Strong Buy).
3D SYSTEMS CORP (DDD): Free Stock Analysis
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