Stratasys (SSYS) Poised To Grow On New Products & Strategies

On Aug 16, we issued an updated research report on Stratasys Ltd. (NASDAQ:SSYS) , a global leader in applied additive technology solutions.

Shares of Stratasys have returned 32.3% on a year-to-date basis, significantly outperforming the industry’s meager gain of 11.32%. Notably, the company has beaten the Zacks Consensus Estimates in three out of the trailing four quarters, with an average positive surprise of 245.83%.

Stratasys reported impressive earnings growth in the second quarter of 2017 that can be attributed to its consistent focus on reducing operating expenses, which were partially offset by marginally lower revenues.

On a GAAP basis, the company reported loss of 11 cents per share, which was much narrower than a loss of 36 cents per share witnessed in the year-ago quarter. On non-GAAP basis too, it marked significant year-over-year improvement with earnings per share increasing to 17 cents from 12 cents posted in second-quarter 2016.

Stratasys’ Turnaround Strategies Are Paying Off

We are positive about Stratasys’ turnaround strategies which include launching innovative products, strategic partnerships and acquisitions, and improving cost efficiencies. These initiatives will help the company to better compete with its arch rival 3D Systems Corporation (NYSE:DDD) and gain more market share as the prospect of 3D printing industry appears bright.

Further, Stratasys’ sustained focus on introducing new innovative products has aided it in gaining various contracts. In late last year, Stratasys launched two products – The Infinite-Build 3D Demonstrator and the Robotic Composite 3D Demonstrator. These launches have helped users to reduce complexities and data loss, consequently enhancing user experience and providing high-quality prints. Customers can benefit from greater accuracy and reliability, which are not otherwise available on a regular printer.

Stratasys has been scaling newer heights across all its business segments.

Over the past few months, the company has inked strategic partnerships to fuel its growth momentum. The 3D printing company has made strategic partnerships with the likes of Schneider Electric (PA:SCHN), The Boeing Co. (NYSE:BA) , Ford Motor Co. (NYSE:F) , Siemens, Boom Supersonic and United Launch Alliance.

Furthermore, the company recently announced gaining a contract to manufacture flight parts for use on Airbus’ A350 XWB aircraft. Notably, Stratasys’ 3D printers are already being used in the aerospace industry, but either for prototypes or as an assembly tool. However, Airbus’ recent deal with Stratasys signifies that the latter’s 3D printed polymer parts are ready for serial production, well reliable, as well as cost effective, and therefore enhance the scope of its wide adoption by other aircraft manufacturers. In fact, we believe that the company will gain these types of contracts in the year ahead, bringing in incremental revenues.

Industry Dynamics Supports Stratasys’ Prospects

The 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 primary designing and product modelling.

According to a recent survey by Lux Research, the 3D printed parts space will be an $8.4 billion global market by 2025, led by automotive, medical and aerospace applications. Additionally, lower costs of 3D printing as compared with traditional manufacturing, industries are increasingly adopting the technology in their manufacturing plants.

Data from the Wohlers Report 2014 revealed that the worldwide 3D printing industry is projected to grow from $3.07 billion in 2013 to $12.8 billion by 2018, and exceed $21 billion by 2020 at a CAGR of 34%.

As the industry leader in 3D printing, the aforementioned factors are encouraging for Stratasys, as it is likely to enable the company to capitalize on opportunities to grab a large share of this market.

Currently, Stratasys carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) Stocks here.

One Simple Trading Idea

Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.

This proven stock-picking system is grounded on a single big idea that can be fortune shaping and life changing. You can apply it to your portfolio starting today.

Learn more >>