3D printer manufacturer Stratasys Inc. (Nasdaq: SSYS) has seen some pretty impressive growth this year. The maker of 3D prototype modeling printers posted third quarter EPS of .40 cents, beating analyst’s estimates of .19 cents. Revenue came in at $49.7 million for the third quarter, 24.5% above the $40 million in third quarter 2011. With a mix of both manufacturing and service revenue, Stratasys is expected to post FY 2012 revenue of $194 to $199 million. Earnings guidance is expected to be $1.37 to $1.40, both raised from previous guidance as a result of strong third quarter results.
If you are like me, you have probably never heard of a desktop printer that is capable of printing plastic parts for use by engineers and designers in developing scalable prototypes. Similar to a CNC machine that’s been in use for years, the 3D printer can take designs and turn them into a tangible model that less than an hour ago was a schematic on a monitor. Truly fascinating technology!
Stratasys recently unveiled their Mojo printer, which is priced at just under $10,000. These units can literally be operated in the same space as your typical paper multifunction machine we all use today. This allows them to sell into a much larger client base, and expand sales globally. They currently have markets in the US, as well as Europe, the Middle East, Korea, Taiwan, Japan, and China. The Mojo has potential to grow the company’s sales in these markets. In addition to the Mojo, they also have the uPrint, Dimension, and Fortus models.
The stock has seen some impressive growth this year, kicking off January around $30 up to today’s close of $70.78. The chart shows the 50 day EMA has been above the 200 day EMA since the FY 2011 earnings call. Throughout 2012, the stock has been trading above it’s 50 day EMA, bouncing along it with very little weakness. Back in April, with the debut of the Mojo printer, volume spiked as interest gained in this new innovation of the computer peripherals sector.
As you can see, the stock is set for a technical breakout above it’s current levels. Pushing up on its 52-week high, which I think will be met with little resistance, there will be a lot of upside going into the end of the year. If Stratasys beats estimates by a significant amount, we could easily see this stock around the 100 levels. Analysts see the company gaining an additional $100 million in revenue, bringing average estimates close to $300 million for 2013.
Stratasys 50/200 day 1 year chart
Of course, the looming fiscal cliff issue as well as competition from companies such as 3D Systems Corp. (Nasdaq: DDD), are factors that need to be weighted heavily in your decision to trade this stock. So do your homework, and keep a close eye on what Obama has in store for our tax dollars next year.