Analyst Takes a New Perspective on 3D Printing

The firm continues to expect strong fundamentals for Stratasys, which are implied in its 2015 outlook, and as a result Canaccord Genuity reiterated a Buy rating on the stock.

Stratasys shook investors earlier this month when it released 2015 fiscal year revenue guidance that was below consensus estimates. The company said its plan was to invest more in order to offer a broader range of products ahead of what it sees as manufacturers that are poised to increase adoption of additive manufacturing in various industries. In other words, Stratasys is boosting spending to maintain growth.

However, Canaccord Genuity expects the core business to deliver at least 25% growth in 2015, leaving modest hurdles for the company’s other segments. According to the firm’s research, a 2015 target of $85 million for Solid Concepts/Harvest would be conservative. On the core business, the research indicates strong North American demand for professional and production printers. Asia is expected to remain a bright spot as well, while Europe was only 22% of total revenue in the most recently reported quarter.

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Canaccord Genuity reiterated its estimates and price targets as:

• The revenue estimate for the fourth quarter of 2014 remains unchanged at $215.7 million, and the 2014 full-year revenue estimate is unchanged at $749 million. The full-year 2015 revenue estimate remains unchanged at $950 million.
• The earnings per share (EPS) estimate for the fourth quarter remains at $0.47, and the 2014 full-year EPS estimate is unchanged at $2.00. The full-year 2015 revenue estimate remains unchanged at $2.15.
• The price target remains unchanged at $100.

Shares of Stratasys were up 3% at $63.40 in the second half of Thursday’s trading session. The stock has a consensus analyst price target of $78.05 and a 52-week trading range of $51.55 to $131.09.