3D printing stock Stratasys (SSYS) has enjoyed a roughly 3% boost in the past two days after Dougherty & Co. upgraded Stratasys stock. Dougherty lifted its rating from “neutral” to “buy” on Monday, targeting $139 for SSYS shares — representing upside of 30%-plus.
The SSYS stock upgrade came after what analyst Andrea James called “home run” acquisitions of Objet and Makerbot, in December 2012 and August 2013, respectively, and follows a market-beating performance for Stratasys stock of more than 30% year-to-date.
These acquisitions opened up opportunities for SSYS in the industrial and consumer (or “prosumer”) markets. Objet is considered one of the most precise large-scale 3D printers, and Makerbot has the advantage of both low-cost 3D printers and a robust online community of “makers” who share blueprints and 3D printing tips on Thingiverse.
More from Dougherty & Co. analyst Andrea James:
“We are upgrading Stratasys to a buy rating and updating our estimates to account for the MakerBot acquisition completed August 15. SSYS products remain best in class and we believe that SSYS should be owned by investors looking for 3D printing exposure. Although shares can be volatile, we see upside to present value if SSYS maintains a 30% CAGR on its EPS over the next two years (excluding MakerBot, this represents a 20% organic CAGR). The points below give us confidence in this level of projected growth. Gartner Research estimates that the unit volume of 3D printer sales should nearly double in 20151, and we see Stratasys as well positioned across the market with the completion of two strategic home run acquisitions made in the past 12 months (Objet and MakerBot).”
Dougherty & Co. has steadily increased its target for SSYS since 2011.
As of this writing, Carla Lake did not hold a position in any of the aforementioned securities.