Is 3D Printing Ready for a Major Comeback?
Many investors have turned their backs on 3D printing after the enthusiasm of years past turned into a major bubble in this part of the technology sector. After the promise of endless growth, and after that bubble burst and sent shares down to the garbage heap, there may again be rekindled interest by at least some growth investors. The week of February 1, 2019, brought a significant analyst upgrade to two of the largest players in the industry.
While the upgrades pointed to different strengths for the two major 3D printing stocks, the reality is that Piper Jaffray suggested that the overall 3D printing demand is actually improving and is starting to see some signs of a move to production applications rather than as for building prototypes and other items in limited quantities.
Piper Jaffray raised Stratasys Ltd. (NASDAQ: SSYS) to Overweight from Neutral and the price target to $31 from $19 this week. The stock had a $22.28 prior close and a $21.17 consensus analyst target ahead of this call.
The analyst noted that growth expectations in the coming year are perhaps the best that they have been in several years. The firm also predicted that earnings should beat expectations, after channel checks with 3D printer resellers. Another boost was said to come from high margin areas and materials for its printers as an accelerator to growth of its materials business.
Stratasys shares were indicated up over 7% on Tuesday morning and ended up closing up 8% at $24.07 that day. Then its shares continued to climb during the week, and Stratasys traded at $25.80 late on Friday. It has a 52-week range of $17.06 to $26.17.
Piper Jaffray upgraded 3D Systems Corp. (NYSE: DDD) to Overweight from Neutral with a $17 price target on the same day, noting that its channel checks indicated a challenging fourth quarter. The firm also found that direct sales of production systems had been running strong during the same fourth quarter. Another positive view was on its Figure 4 launch and a new metal 3D printer that should help reaccelerate its product growth during 2019 in the following years.
Shares of 3D Systems had traded at $11.54 ahead of the upgrade, but the stock closed up 6.3% at $12.27 on Tuesday. Its shares traded close to $12.50 late on Friday due to some selling pressure that day. The 52-week range is $8.88 to $21.78.