Shares of Stratasys (SSYS) may be down 13.5% year-to-date as I type, but it soared in 2013; Stratasys finished the year up almost 73%. Some investors in the company may have worried while the ones who go long can be always expect a rebound in the latter half of the current fiscal year. Various surveys and market analyses predict the worldwide 3D printing business will develop from $2.5 billion in 2013 to $16.2 billion by 2018, achieving a CAGR of 45.7% in the figure period. Such market size and growth will always leverage the growth of the company.
Stratasys is a business pioneer in 3D printing, and it really has the major stake of the overall industry, by number of installations, in the business. This stake of the overall 3D printing markets is mainly due to its Makerbot division which works in this sort of 3D printing and targets home users. In any case, SSYS isn't just centered on the home, as the organization has modern/top of the line proficient equipped printers too, catering to industrial users. Furthermore with late development in and a bigger concentrate on global markets, there is a lot of motivation to accept that Stratasys can grow at a noteworthy pace.
Going strong on quarter
Stratasys recently posted its second quarter financial results for the current fiscal. Consolidated revenue for the second quarter of 2014 was $178.5 million, a build of 67% contrasted with the same period a year ago; or up 35% when barring the effect of acquisitions. Non-GAAP net income for the second quarter was up by 51% over the same period a year ago to $28.0 million, or $0.55 for every diluted share.
Makerbot brand contributed $33.6 million to Stratasys' second quarter revenue. In the meantime, during the quarter the organization said it will secure Solid Concepts and Harvest Technologies. Both arrangements have finished in the second from last quarter. In light of these acquisitions and other positive forces, Stratasys upgraded its full-year direction.
Acquisitions can further boost revenue
Stratasys over the past acquired different growing companies that enabled it to establish a strong products and services portfolio. In the second quarter, it completed the acquisition of Solid Concepts and Harvest Technologies. With this procurement it will help enable Stratsys to directly sell 3D printers to its clients, increasing its client base. The client base of Solid ideas is spread crosswise over an extensive variety of verticals, including medicinal, aviation and modern, among others. Both these organizations will be joined under Redeye which an on-interest is printing services focusing on modern clients. Both these organizations give comparable services as of Redeye.
David Reis, chief executive officer of Stratasys, stated, "We look forward to enhancing our customer offering with the completion of this transaction. With Solid Concepts' deep knowledge of manufacturing and vertical focus, such as medical and aerospace, Stratasys will be even better positioned to meet our customers' evolving additive manufacturing requirements. We are delighted to welcome the talented employees of Solid Concepts to the Stratasys family and look forward to completing the acquisition of Harvest in order to form a leading strategic platform to better meet customers' needs."
In light of the acquisitions in the second quarter and other positive energy, Stratasys redesigned its full-year direction. The organization now figures revenue will come in between $750 million and $770 million, up from $486.7 million last year and from past direction of $660 million to $680 million. It expects non-GAAP net income to be between $117 million and $122 million, or $2.25 to $2.35 for every share. That looks at $1.84 of EPS a year ago and former direction for $2.15 to $2.25.
Looking at its solid development prospects of the 3D printing industry and SSYS' advantageous position in the space, I can foresee growth in the near future at a forward P/E ratio of 38, Moreover, throughout the following five years, incomes are expected to develop at a CAGR of around 20%, which makes Stratasys a more sensible purchase to profit from 3D printing's development.
In the event that you are searching for an organization that is looking incredible from an income point of view, is in a high development industry and is one of the few that isn't at a 52-week high at this time, consider SSYS. The organization may at present have a lot of room to run and looks ready to make new highs.
To that end, Stratasys is best-positioned to boost the technology's penetration of industrial and educational markets, and is recommended for Buy.