Stratasys cites major sales/marketing and R&D investments for its EPS guidance. Both Stratasys and 3D Systems have been ramping their R&D spend (I, II) after years of keeping it at a miniscule percentage of revenue (a policy that hadn't gone unnoticed among critics).
Stratasys expects its op. margin to be flat Y/Y in 2014, with margin growth in its core business to be offset by a larger contribution from MakerBot, which has a lower op. margin. Capex is expected to be in a range of $50M-$70M (compared with revenue of $660M-$680M).
RBC has started coverage on 3D Systems and Stratasys with Outperform ratings, and predicts the 3D printing industry will post a 24% CAGR from 2013-2021.
The firm likes 3D Systems' end-to-end product line, M&A activity, and margin expansion potential, and it's a fan of Stratasys' 3D-printed parts business (RedEye) and dominant additive manufacturing position, as well as MakerBot.
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