Analysts see potential in new Stratasys systems, but still cautious on stock
After Stratsys (SSYS) unveiled two new 3D printing technologies, research firm Piper Jaffray said that they could cause the company's growth to accelerate over the longer term, while Deutsche Bank said they were "interesting." However, both firms remained cautious on the company's nearer term outlook, citing the ongoing challenges facing the 3D printing sector. NEW TECHNOLOGY: Stratasys yesterday unveiled its "Infinite-Build" system, which enables 3D printing on a vertical plane, "increasing throughput and repeatability" and allowing "practically unlimited part size in the build direction," according to the company. The technology is designed to address the requirements of aerospace, automotive and other industries for "large lightweight, thermoplastic parts with repeatable mechanical properties," the company stated. It noted that it had partnered with Boeing (BA) to develop the technology. Stratasys also collaborated with Siemens (SIEGY) to develop a "Robotic Composite 3D Demonstrator." The system integrates additive manufacturing technologies with industrial motion control hardware and design-to-3D printing software capabilities provided by Siemens, Stratsys stated. It enables more precise, faster development production of composite parts "made from a wide variety of materials" and used by multiple industries, Stratasys stated. ANALYST REACTION: The new technologies should help the company expand deeper into manufacturing applications, wrote Piper Jaffray analyst Troy Jensen. Moreover, the systems are a "huge step forward" for Stratasys and could ultimately cause its growth to accelerate while enabling it to diversify away from the prototyping market and towards the end product market, Jensen stated. However, the technologies probably won't be available for one to two years and the company continues to face weak demand and competitive threats, warned Jensen, who kept a $23 price target and Neutral rating on the shares. Stratasys' new technologies were "interesting," but the company did not divulge a timeline for their implementation, wrote Deutsche Bank's Sherri Scribner. Noting that Stratasys did not release new financial information and that the 3D printing sector is "still seeing a pause," Scribner kept a Hold rating on the shares. PRICE ACTION: In morning trading, Stratasys gained 4.5% to $23.54. Other 3D printer makers also rose, with 3D Systems rising 2.7% to $16.22, ExOne adding 2.2% to $14.28 and Materialise (MTLS) up 1.3% to $6.36.