On Dec 27, 2013, we upgraded our recommendation on
) to Outperform from Neutral, based on its favorable prospects
and long-term outlook. The company reported encouraging
third-quarter results on the back of solid performances from its
Product and Services segments.
Currently, the stock sports a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Stratasys has delivered positive earnings surprise in two of the
last four quarters, with an average beat of 284.3%. Also,
Stratasys delivered robust revenues in third-quarter fiscal 2013
buoyed by solid performances by its Product and Services
segments. Reported revenues also surpassed the Zacks Consensus
Additionally, management provided an encouraging outlook for
fiscal 2013. Revenues are expected to range between $470 million
and $490 million, up from the previous guidance of $455.0 million
to $480.0 million. Stratasys' earnings are anticipated in the
range of $1.75 to $1.90 per share, significantly higher than the
Zacks Consensus Estimate of $1.43 per share.
Stratasys' product launches and global expansion will help it to
generate incremental sales in the long run by increasing its
installed base. Moreover, the MakerBot acquisition is expected to
aid its 3D systems business growth and generate higher recurring
revenues, going forward.
With the assimilation of Stratasys' 3D printing application
programming interface into
) Windows 8.1, its adoption rate is likely to increase. However,
the company is concerned about its high-cost business model and
competition from big and small players like
3D Systems Corp.
Nonetheless, the company witnessed positive estimate revisions
for the current quarter. Out of the three estimates, one was
revised upwards over the past 60 days. This led to a significant
increase of 39 cents in the Zacks Consensus Estimate for the
current quarter, which now stands at 41 cents. In addition, for
the full year, the Zacks Consensus Estimate jumped significantly
Investors may also consider another stock,
Alps Electric Co. Ltd.
), carrying a Zacks Rank #1 (Strong Buy).
ALPS ELECTRIC (APELY): Get Free Report
3D SYSTEMS CORP (DDD): Free Stock Analysis
MICROSOFT CORP (MSFT): Free Stock Analysis
STRATASYS LTD (SSYS): Free Stock Analysis
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