Merrill Lynch Reviews Stratasys (NASDAQ:SSYS) and 3D Systems (NYSE:DDD)


The Euromold conference of 2014, held last week in Frankfurt hosted review of two major 3D printing firms by Merrill Lynch. The reviewed firms were Stratasys (NASDAQ:SSYS) and 3D Systems (NYSE:DDD).

It has been reviewed by Merrill Lynch that 3D systems holds concentrated focus on integrating several attained assets and driving enhanced speed and larger built printers.  The firm is expected to showcase more low-end products at the Consumers Electronic Show (CES) in Jan, 2015.

Merrill Lynch has maintained the below average rating for the firm as it continues to anticipate gradual expansion to continue in closer terms. The price objective for 3D Systems (NYSE:DDD) is set at $40, while other estimates have not changed for the company. The $0.96 EPS, estimated for 2015 has also remained unchanged. In addition, the estimates of $862 million in revenue and a market cap of almost $4 billion have also remained unchanged. The price target as agreed by the analysts is $46.10, with trading range between $32.64 and $97.28 based on a 52 week period.

Of all products displayed by 3D Systems at the conference, ones that caught the eye was the ProX 800 SLA printers that feature new print head with smaller footprint, the ProX 500 Plus Printer has Selective Laser Sintering (SLS), and direct metal ProX 400 printer that specifically targets the production of readymade useful parts and finish apparatus for aerospace, medicinal devices, fashion, automotive and mobile devices.

Stratasys (NASDAQ:SSYS) is expected to show gradual growth in terms of revenue that is projected to exceed 25%. This will be a resultant of rapid prototyping, jigs manufacture, direct digital production, fixtures, and enhanced growth at consumer level. The model may have substantial influence, however, there won’t be any significant improvement in margin.

Stratasys (NASDAQ:SSYS) stated that success in 3D printing comes with quite a clear roadmap, and comprises three main points: hardware, ecosystem and materials.

‘On the materials side, the evolution in 3D should be to resemble end use parts and physical properties so as to give an exact look and feel. In hardware, the printers need to be production grade, faster and reliable; while the ecosystem needs to evolve to better design software, manufacturer collaboration, and professional services.’

According to Merrill Lynch, Stratasys (NASDAQ:SSYS) has succeeded in expanding its lineup with several new printers as well as materials. These include six new triple jet printers and two new Fortus printers. In addition, further growth is expected in the Connes3 and makerbot models. Marrill Lynch suggests that the company should bring on board new tech platforms in two years.

The estimates decided upon for Stratasys (NASDAQ:SSYS) have also remained unchanged. The EPS for 2015 is being placed at $2.77, with revenue that has been summed at $1.01 billion. Also, price objective also remains stagnant on $140. The stock price target is $133.71 as agreed by the analysts. The trading range based on 52 weeks is placed between $85.30 and $138.10, respectively. The market capitalization has been placed at $5 billion.