Stratasys More Than 3D Guns

English: Miniature turbine 3D print from Rapid...

English: Miniature turbine 3D print from Rapid 2006 in Chicago, Illinois. (Photo credit: Wikipedia)

( please also review our article on 3D Printing in yesterday’s blog)

SSYS : NASDAQ : US$83.39
BUY 
Target: US$95.00

COMPANY DESCRIPTION:
Stratasys Ltd. is a global provider of 3D printing solutions,including a wide range of 3D printers, consumable print materials and services. Stratsys Ltd. was formed with the merger of Stratsys and Objet in a stock-for-stock merger completed in December 2012. The combined company has an impressive portfolio of 3D printing and direct digital manufacturing solutions.
All amounts in US$ unless otherwise noted.

Investment recommendation


We reiterate a BUY rating and increase our price target to $95 driven by gross margin upside and solid execution of cross selling implementation.
With services gross margins poised to rebound and management’s expectation to sustain a high corporate gross margin level, we believe 2013 EPS guidance is conservative when applying the midpoint of guidance for revenue. We therefore raise our EPS for 2013E to the high end of the range at $1.95, increase 2014E EPS to $2.63 off of the higher base, maintaining that EPS upside potential remains versus our revised numbers given management is executing on its cross-selling effort ahead of plan.
Investment highlights
 SSYS reported Q1/13A (Mar) earnings this morning. Revenues and EPS were $98.2 million and $0.43, compared to consensus estimates of $98.3 million and $0.38 and our estimate of $98 million and $0.37. Revenue increased 18% Y/Y (2% Q/Q) driven by 31% Y/Y growth in services (RedEye +42% Y/Y, Customer Services 25% Y/Y) and 16% Y/Y growth in products (Consumables +18% Y/Y, Printers +15% Y/Y)
 Management reiterated their F2013 targets, with revenue expectation of $430 million to $445 million (20% to 24 % Y/Y growth) and non-GAAP EPS expectation of $1.80 to $1.95.

3D Systems BUY Target $50

BrickArms BA-M5 and BA-M6 Prototypes

BrickArms BA-M5 and BA-M6 Prototypes (Photo credit: Dunechaser)

DDD : NYSE : US$43.85
BUY 
Target: US$50.00

COMPANY DESCRIPTION:
3D Systems is a leading provider of rapid 3D printing, prototyping and manufacturing solutions used to create product concept models, precision and functional prototypes, master patterns for tooling, and end-use production parts for direct manufacturing. 3D Systems’ products allow complex three-dimensional objects to be manufactured directly from computer-aided design and manufacturing (CAD/CAM) software tools.

CONTINUED MULTIPLE EXPANSION
Investment recommendation
We are increasing our price target following healthy appreciation for DDD shares over the past month. While share count increases slightly on recent secondary, we believe DDD can deliver upside to consensus estimates driven by strong printer and services revenue. We also expect multiple expansion as the company moves into the commercialization phase for Bespoke (carpal tunnel braces) in H2 of this year. Reiterate BUY.
Investment highlights
 3D Systems completed a 7.5 million (includes 1.3 million insider shares) secondary share offering on Friday, May 10 before the open.
The secondary offering was priced at $40/share and DDD raised $300 million through the offering. DDD intends to use the proceeds to
finance further acquisitions and for general corporate purposes.
 We are adjusting our model for the share dilution. Our C2013 EPS is revised down from $1.12 to $1.06 and our C2014 EPS is revised down from $1.62 to $1.52. Our revenue estimates remain unchanged.
Valuation
DDD’s price target of $50 (was $45) is 33x our C2014 EPS estimate of $1.52, in line with Stratasys (SSYS : NASDAQ :$83.39 | BUY), which is
currently trading at 34x our C2014 EPS estimate. In the last two years on a NTM P/E basis, DDD has traded in the range of 16x to 43x compared to
SSYS at 16x to 47x.

Stratasys Target $ 82

English: Miniature turbine 3D print from Rapid...

English: Miniature turbine 3D print from Rapid 2006 in Chicago, Illinois. (Photo credit: Wikipedia)

SSYS : NASDAQ : US$69.45
BUY 
Target: $82.00

COMPANY DESCRIPTION:
Stratasys Ltd. is a global provider of 3D printing solutions, including a wide range of 3D printers, consumable print materials and services. Stratsys Ltd. was formed with the merger of Stratsys and Objet in a stock-for-stock merger completed in December 2012. The combined company has an impressive portfolio of 3D printing and direct digital manufacturing solutions.

We are initiating coverage of Stratasys with a BUY rating and an $82 price target. We believe the combination of strong secular growth and a scarcity of public plays on 3D printing technology will continue to drive a healthy valuation, while the recent merger with Objet presents
opportunities for SSYS to deliver upside to consensus estimates.
Investment highlights
 We expect revenue growth in the low-20% range over the next several years, driven by the continued adoption of 3D printing for use in prototyping and parts production.
 SSYS has a dominant position in systems used in prototyping, from the concept stage (Objet PolyJet) to form, fit, and function (legacy SSYS FDM).
 An expanded reseller network should allow SSYS to accelerate already stellar growth for Objet’s systems and drive an increasing attach rate to SSYS’s FDM install base.
 Stronger printer units in 2013 set up for rebounding materials and margins in 2014, with the expansion of the printer install base.
Valuation
SSYS’s price target of $82 is 32x our C2014 EPS estimate of $2.45 plus net cash of $3.84/share.
Risks
Risks to our thesis include lower than expected merger synergies, both from a top-line and cost perspective. We also believe SSYS’s lack of
systems capable of producing metal parts may be perceived negatively as companies specializing in metals gain more attention from investors

Staples Will Offer In-Store 3D Printing

English: 3D printer Objet Eden 260V. Polyjet h...

English: 3D printer Objet Eden 260V. Polyjet high-precision technology, the 3D printer capable of printing 260x260x200mm’s volume has.This 3D printer is the technical high rapid prototyping. Magyar: Objet EDEN 260V 3D nyomtató. Polyjet technológiával működő nagy pontosságú 3D nyomtató, amely 260x260x200mm-es nyomtatási térfogattal rendelkezik. A gyors prototípusgyártás (rapid prototyping) jelenlegi csúcstechnológiájának számít ez a 3D nyomtató. (Photo credit: Wikipedia)

Nov. 30

The ubiquitous office supply store and print shop, will expand to offer in-store 3D printing services, reports The Register

The service will be called “Staples Easy 3D.” Customers will upload a 3D object file from their home computers, then pick up the completed object at a store or arrange to have it shipped.

So now Staples isn’t just about photocopies and Christmas cards. It will be about physical objects in the real world, only further bringing 3D printing into the mainstream.

One question: will Staples let you use its service to print guns?

3D printing is a process by which a machine shapes plastic into an object by laying down plastic one layer at a time. 

The potential here is huge – any object you can design using computer software can come to life in the real world as a physical object. A number of 3D printing companies have sprung up with the goal of making this technology both affordable and accessible to whomever wants it.

Massachusetts-based Formlabs began a Kickstarter project seeking $100,000 to bring to market the Form-1, its new 3D printer design. It ended up clobbering that goal, finally raising $2.9 million.

We spoke with Formlabs cofounder Maxim Lobovsky to get his take on why the project ended up being such a home run.

“There was an unmet need,” he said. “Professional 3D printers at the high end run tens of thousands of dollars. The low-end equipment is more affordable but less than professional. There was a huge hole in between to satisfy with architects, jewelers, and other professionals in that middle ground who can make use of 3D printing.”

The current batch of affordable hobbyist 3D printers carry out their process by means of plastic extrusion–plastic is melted and laid out very precisely one layer at a time until a fully-formed 3D object takes shape. Formlabs decided to take an entirely different approach.

“We use a photochemical process called stereolithography,” they said. “We hit liquid resin with a wavelength of light. It polymerizes and hardens, but this has nothing to do with heat. It’s an extremely precise laser that traces out objects to within 5 microns of precision.”

Stereolithography is one of the oldest forms of 3D printing technology, but Formlabs seems to have improved on a classic. The Form-1 was engineered to have as few moving parts as possible and the team took efforts to keep the price low–for example, the blue laser that hardens the liquid is the same as the readily-available laser in consumer Blu-Ray players.

They told us, “3D printers work fine when they cost $100,000, so we wanted to bring that price down.”

The most obvious parallels are to the early days of the PC industry. Where mainframe computers of the 1970s are like the super-expensive 3D printers of today, the first Macintosh is like the Form-1, a device that fits on your desk but still carries out all the functionality of its larger, pricier counterpart.

“The first PCs didn’t go to homes. They went to businesses,” Formlabs told us. “We tend to see that as the parallel to what we’re doing here.” And this obviously doesn’t exclude other 3D printing companies. Brook Drumm of Printrbot and Bre Pettis of Makerbot each chipped in for a Form-1 of their own.

For the immediate future, Formlabs plans to deliver products to its Kickstarter backers and hopes to make them “very happy.”

The larger mission after that is to prove that there’s far more demand for 3D printing than has been realized, and if a Form-1 3D printer should end up on every single engineer’s desktop in the process, they can certainly consider that a mission accomplished.

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