On Tuesday, Cantor Fitzgerald initiated coverage of Stratasys Inc. (NASDAQ: NASDAQ:SSYS), a leader in 3D printing technology, with an Overweight rating and a price target of $24.00. The firm's analysis suggests that Stratasys is well-positioned to benefit from new product cycles and a favorable industry climate.
Stratasys is expected to experience accelerated growth due to a series of new product introductions. The company has a strong foothold in Fused Deposition Modeling (FDM) technology and has broadened its offerings through both in-house development and strategic acquisitions. The recent launch of Stereolithography (SLA), Digital Light Processing (DLP), and Selective Absorption Fusion (SAF) printers, as well as the high-end FDM F3300 printer, are anticipated to drive growth in 2024 and beyond.
The additive manufacturing sector saw increased demand during the Covid-19 pandemic as companies sought to mitigate global supply chain disruptions by reshoring or nearshoring operations. This has positioned additive manufacturing as a viable solution for these supply chain challenges. Despite a slowdown in growth in 2023 due to factors such as the Ukrainian war, rising interest rates, and recessionary fears, there is a sense of pent-up demand within the industry.
Cantor Fitzgerald's assessment is that this accumulated demand could surge once economic conditions become more favorable. The firm believes that Stratasys' new product cycles should help capitalize on this latent demand, thus enhancing the company's growth and profitability in the coming years.
The analyst's commentary underscores the potential for Stratasys to leverage its established leadership and expanded product portfolio to meet the evolving needs of the additive manufacturing industry. This strategic positioning, combined with the anticipation of a release in pent-up demand, forms the basis of the Overweight rating and the $24 price target set by Cantor Fitzgerald for Stratasys shares.
InvestingPro Insights
As Stratasys Inc. (NASDAQ: SSYS) garners attention with Cantor Fitzgerald's optimistic outlook, a glance at the company's financial health and market performance offers additional insight. According to InvestingPro data, Stratasys holds a market capitalization of $877.01 million and a Price to Book ratio for the last twelve months as of Q3 2023 at 0.99, indicating that the company's stock is trading close to its book value. Despite a negative P/E ratio of -7.90, reflecting its unprofitability over the last twelve months, analysts predict a turnaround with net income expected to grow this year.
Moreover, the company's strong return over the last three months, at 23.71%, showcases investor confidence which could be a reflection of the new product cycles and industry climate that Cantor Fitzgerald highlighted. The InvestingPro Tips also reveal that Stratasys holds more cash than debt on its balance sheet and that its liquid assets exceed short-term obligations, suggesting a stable financial position that could support its growth initiatives.
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