3D printer maker Stratasys (NASDAQ: SSYS) reported better-than-expected first-quarter results on May 1. The results were well-received by the Street, as Stratasys stock has risen about 10% since the results were announced.

Meanwhile, the company’s strategies appear to be working, and Stratasys is well-positioned to rally much further going forward. Below are my four main takeaways from the company’s earnings.

As I have previously argued, Stratasys stock will be boosted “by the manufacturers of industrial products that are made of many complex parts, all of which have to be precisely made.” I identified planes as one such industrial product.

There is some evidence that my prognosis was accurate. On its Q1 earnings conference call, SSYS reported that its orders from U.S. aerospace customers had risen meaningfully in Q2, although it declined to reveal the precise amount by which it increased.

The sector’s high level of satisfaction with the company’s newer, higher-end products bolstered demand for its products, Stratasys indicated.

A Closer Look at Stratasys Stock

SSYS provided additional evidence that it is indeed benefiting from strong demand from the aerospace sector. The National Institute of Aviation Research evaluated the ability of two of SSYS’ printers to manufacture interior aircraft parts. This demonstrates that many aerospace companies are interested in using the company’s products.

According to Stratasys, the evaluation, “makes it easier for others in (the aerospace) industry and supply chain to leverage our technology with a fraction of the testing, qualification and investment needed previously, and without the risk of an unknown outcome.”

It sounds like the testing went very well and will result in larger, accelerated orders for Stratasys from aerospace and defense companies, greatly boosting Stratasys stock in the process.

Also during the earnings call, Craig-Hallum analyst Danny Eggerichs said that he was seeing “rapid adoption” of 3D printing by the dental sector. Stratasys said that it was “very active” within a number of areas within the dental market, and reported that it was seeing increased adoption of its products by the dental sector.

Stratasys’ Strategies Are Working

Stratasys reported that the newer products that it’s introduced more recently are starting to spark increased overall demand. Among the company’s newer products  that have generated strong demand are its PolyJet printers

According to the company, the high degree of “realism” of the PolyJet printers has appealed to consumer-packaged goods and medical companies. The company’s website indicates that many companies are using PolyJet to develop prototypes and manufacturing tools.

Although SSYS would benefit more if its printers were used to manufacture products for end users, there are tens of thousands consumer-packaged goods and medical companies in the world. As a result, Stratasys will get a tremendous boost if its products become widely used by these sectors as prototypes and manufacturing tools.

Meanwhile, Stratasys is currently developing additional products that it expects  to generate  increased demand in the future, the company reported on its earnings call.

Finally, Stratasys stated that its high-end printers generate demand for its materials and services. Since the company’s high-end printers have been selling well recently, SSYS expects to benefit from strong demand for its  materials and components going forward.

The Bottom Line on Stratasys Stock

Piper Jaffray’s Troy Jensen, who has closely followed the 3D printing space for many years, wrote that SSYS’ results were well-positioned “to accelerate” in the “second half of 2019 and through 2020.” Jensen stated that the company’s “tone and enthusiasm” about its new products have improved, and he kept a $32 price target and an Overweight rating on SSYS stock.

Stratasys’ Q2 results were meaningfully stronger than analysts, on average, had expected. Moreover, excluding currency fluctuations, the company’s business expanded meaningfully. Excluding foreign exchange fluctuations, its total revenue rose 5% year-over-year, while its hardware sales jumped 7% YoY and its materials sales increased 5%.

Trading at two times sales and with a market cap of just $1.34 billion, SSYS stock can rise meaningfully going forward as the adoption rates of the company’s products surge.

As of this writing, the author owned shares of Stratasys stock.