Here's Why You Should Add Stratasys Stock To Your Portfolio
Zacks Investment Research | Dec 29, 2017 02:34AM ET
Stratasys, Ltd. (NASDAQ:SSYS) has generated significant returns for investors in the year-to-date period and has the potential to exceed expectations in the days ahead as well.
The stock has soared 31.7% in the year so far, significantly outperforming the industry ’s gain of 16.5%.
Let’s check out the reasons for this impressive surge in share price and see why Stratasys is likely to maintain the momentum next year as well.
Beneficial Turnaround Strategies
We are positive about the turnaround strategies of Stratasys, a manufacturer of 3D printers and in-office rapid prototyping (RP) and manufacturing systems. The launch of innovative products, strategic partnerships and acquisitions, and improving cost efficiencies are further tailwinds.
Introduction of various innovative products has helped it in winning new contracts. Stratasys launched two products late last year – The Infinite-Build 3D Demonstrator and the Robotic Composite 3D Demonstrator. These launches have helped to reduce complexities and data loss, thereby enhancing user experience and providing high-quality prints.
The company has also entered into a few notable strategic partnerships to fuel growth. The 3D printing company has inked deals with the likes of Schneider Electric (PA:SCHN), The Boeing (NYSE:BA) Co., Ford Motor (NYSE:F) Co., Siemens, Boom Supersonic and United Launch Alliance.
The collaborations are aimed at introducing advanced 3D printing technologies to the aerospace and automotive industries. Stratasys also intends to expand its geographic reach and drive market penetration.
Airbus’ recent deal with Stratasys is a prominent example in this regard. In July, the company announced a contract to manufacture flight parts for Airbus’ A350 XWB aircraft, which is a notable addition to its kitty.
Supportive Industry Dynamics
The 3D printing market presents a favorable long-term investment opportunity, as a large number of engineers, designers, architects and entrepreneurs are resorting to 3D solutions for primary designing and product modelling.
Data from MarketsandMarkets 2017 report revealed that the worldwide 3D printing industry is expected to witness CAGR of 25.76% through 2017 to 2023 and reach $32.78 billion.
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We believe that Stratasys with its strategic initiatives is well poised to grab the growth opportunity.
Zacks Rank and Key Picks
Stratasys has a Zacks Rank #2 (Buy). A VGM Score of A is a further testament of its upside potential. The VGM Score rates each stock on their combined weighted styles, helping to identify those with the most attractive value, best growth, and most promising momentum, across the board.
Some of the other top-ranked stocks in the broader technology sector are NVIDIA Corporation (NASDAQ:NVDA) and IPG Photonics Corporation (NASDAQ:IPGP) , both sporting a Zacks Rank #1 (Strong Buy), and Intel Corporation (NASDAQ:INTC) , with a Zacks Rank #2. You can see .
Long-term expected EPS growth rate for Intel, NVIDIA and IPG is projected to be 8.42%, 10.25% and 12%, respectively.
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