On Dec 28, Zacks Investment Research upgraded Stratasys Ltd. (SSYS - Analyst Report) to a Zacks Rank #1 (Strong Buy). The upgrade followed positive estimate revisions over the last 60 days.
Why the Upgrade?
Stratasys makes 3D printers as well as photopolymer materials that are used in the three dimensional printing process. Also, Stratasys’ additive manufacturing (AM) solutions have been used by companies in the automotive, aerospace, defense, electronics, consumer goods, education and other sectors to improve product designs. Moreover, Stratasys’ acquisition of MakerBot is expected to aid its 3D systems business growth.
Stratasys’ product launches and global expansion will help itto generate incremental sales in the long run by increasing its installed base. This will help Stratasys to generate higher recurring revenues, going forward. With the assimilation of Stratasys’ 3D printing application programming interface into Microsoft’s (MSFT - Analyst Report) Windows 8.1, its adoption rate is likely to increase.
However, Stratasys is concerned about its high-cost business model and competition from big and small players like 3D Systems Corp. (DDD - Analyst Report).
Nonetheless, Stratasys delivered robust revenues in the third-quarter of fiscal 2013 buoyed by solid performances from its Product and Services segments. Reported revenues also surpassed the Zacks Consensus Estimate.
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.
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 in the Zacks Consensus Estimate, which now stands at 41 cents for the current quarter.
Investors may also consider Alps Electric Co. Ltd. (APELY - Snapshot Report) carrying a Zacks Rank #1 (Strong Buy).