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Why Stratasys Is The Best Way To Invest In 3D Printing


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What Makes Stratasys Stand Out In 3D Printing

Stratasys3D printing is emerging as one the next big investment opportunities, and Stratasys Ltd. (NASDAQ:   SSYS) appears to be the best way to invest in 3D printing. Stratasys provides additive-manufacturing printers, also known as 3D printers, that are used to design, create, and manufacture products on-demand using 3D printing processes. What makes Stratasys stand out above other companies in the field of 3D printing is Stratasys’ focus on their core 3D printing business, their relationship with technology distributors, and their strong focus on bringing 3D manufacturing to consumers and companies that are increasingly turning to 3D printing for their design and manufacturing needs. While other companies are fighting for market share and trying to define themselves in the fast growing 3D printing sector, Stratasys is emerging as a dominant player, and is the one stock that all investors that want to have exposure to the 3D printing need to have in their portfolio.

Why Stratasys Is The Best Way To Invest In 3D Printing

One of the reasons why Stratasys is the best stock in the 3D printing sector is because the company has earnings growth momentum behind it that is key to propelling the stock to higher levels in coming years. In August 2014, Stratasys reported second quarter revenue and earnings that exceeded average analyst estimates, which is something that a stock needs to maintain upward movement. During the August 2014, Stratasys also increased their forward looking revenue and earnings for the entire fiscal year, citing growing demand for their 3D printing products and services.

The other titan in the 3D printing sector is Stratasys’ primary competitor 3D Systems (NYSE:DDD).   Stratasys is clearly beating 3D Systems in the retail 3D printing segment and is a strong competitor in the commercial segment of the business. Looking at the bigger picture, Stratasys is executing their business plan by meeting the growing demand for 3D printers and 3D printing solutions. Stratasys is growing faster than 3D Systems, and it shows in the performance of SSYS versus DDD over the past two years. Proof of the superior performance of Stratasys can be seen by comparing the performance of Stratasys and 3D Systems’ long-term stock charts. SSYS has a clear up-trend over the past couple of years, while DDD has been up and down with no bullish pattern.

What Stratasys is currently doing better than 3D Systems is focusing on its core 3D printing business and staying at the cutting edge of the 3D printing industry. Stratasys is executing well in the short-term and is relying upon internal research and development to bring new 3D printing products and services to market. In early 2014, Stratasys started selling the world’s first 3D color printer that is able to accept a multitude of input materials, which has made the company the talk of the 3D printing industry. Stratasys has also been successful at developing key distribution relationships with large computer retailers. For example, Stratasys’ MakerBot 3D printers are available through Dell Computer’s third-party product offerings. They have aggressively marketed 3D printing manufacturing to individuals and small businesses. An example of which is their 3D printing services that are available to individuals and small businesses at nearly 100 UPS stores.

What Is 3D Printing – A Quick Primter

3D Printer HammerSince 3D printing is still not well known by many investors, it is important to take the time to understand what 3D printing is and its ramifications as an investment opportunity.   3D printing is the use of specialized printing machines to manufacture products that can be used in real-world applications. A 3D printer creates a product by taking numerous passes over a work area that are controlled by a computer driven design program. It can take thousands of passes to create a finished product. During each pass, a new layer of material is deposited in the correct locations to create the desired product. For example, if a hammer is needed, then a hammer manufacturing program is run on a computer that controls a 3D printer, and after many passes by the printer, a useable hammer is produced by the 3D printer.

Why An Investment In Stratasys Makes Sense Now

Stratasys 3D PrintersThe bottom line is that Stratasys has a management team that is focused on building the company’s core 3D printer business, while introducing new and innovative products and distribution channels that keep the company’s offering at the fore of the 3D printing industry. This is driving its fast revenue and earnings growth, which are the underpinnings of good stock performance over time that rewards long-term investors with a higher stock price. Being in a fast-growing technology sector helps, as 3D printing is going mainstream with thousands of manufacturing companies around the world looking for ways to integrate 3D printing into their manufacturing processes.

Manufacturing companies have shifted to 3D printing faster than anticipated, as the cost and quality advantages of 3D printing become widely understood. General Electric (NYSE: GE) gave the 3D printing industry a big boost when the company announced a plan to use 3D printers to manufacture jet engine fuel nozzles to reduce the number of parts suppliers they have to rely upon, while saving on manufacturing costs and increasing the reliability of their fuel nozzles.   General Electric’s announcement of a major push into 3D printing in their manufacturing processes has been followed by hundreds of other companies that are eager to take advantage of the cost savings and increased quality control that 3D printing manufacturing processes offer.

The fast adoption of 3D printing by manufacturers is going to drive Stratasys growth in revenue and earnings for years to come, which is exactly what a stock needs to continue moving higher in price. Of course, there are risks associated with making an investment in Stratasys, such as a potential slow down in the overall economy or a competitor that surges past Stratasys.  However, if Stratasys can stay on its present growth trajectory, with a growing economy at its back and growing demand for 3D printing products, the company’s stock should be a market outperformer over the coming years.

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