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Stratasys Stock: Mixed Prospects

Dec. 01, 2021 12:09 PM ETStratasys Ltd. (SSYS)8 Comments


  • Stratasys put out a strong Q3 2021 result which beat consensus on the top line, the bottom line, and even put out solid guidance ahead.
  • The problem though, is that its business isn't growing all that fast.
  • What's more, Stratasys has thin free cash flow margins, at approximately 6% for 2021.
  • At 3x this year's revenues, the stock appears cheap, but I contend that it's arguably closer to fairly valued.
  • I do much more than just articles at Deep Value Returns: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »
3D printout

izusek/E+ via Getty Images

Investment Thesis

Stratasys (NASDAQ:SSYS) is a 3D printing manufacturer. Even though it's well-positioned to benefit from a rapidly growing space, Stratasys is simply not growing all that fast.

In the best-case scenario, this business is likely to be growing at somewhere

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Michael Wiggins De Oliveira is an energy specialist whose primary focus is capitalizing on “the Great Energy Transition” - the confluence of decarbonization, digitalization with AI, and deglobalization - to achieve greater investment returns. Through his 9+ years analyzing countless companies, Michael has accumulated outstanding professional experience in the energy sector and a following of over 40K on Seeking Alpha.

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Comments (8)

namam75 profile picture
@Michael Wiggins De Oliveira The company beaten/guided solidly for next year but still stock got hammered...trading at less than 2X 2022 revenue excluding cash.....
Blue Chip Investing profile picture
Michael, you are concerned about paying 3x revenue? This a multiple below that is below that of the s and p 500 and very low for a company in the early innings of its rapid growth cycle. Due to the supply chain crisis, nosebleed raw material prices and elevated labor prices, SSYS’ value proposition with 3 printed technology is expanding the target addressable market by leaps and bounds. If you believe in the narrative that 3D printing is going to redefine the manufacturing and supply chain industry by enabling scalable and Customizable components for basically anything currently manufactured in healthcare, automotive, aerospace and numerous other categories, you should be thrilled you can pay 3x. Combine that with a balance sheet buttressed by 500 million of cash and zero debt and you have the foundation for a potential 10 bagger. Or, 3D printing is an illusion and will be relegated to novelty construction and niche markets.
marriottmare profile picture
3D printing will b the future of manufacturing, a def. Buy!
-=Prospero=- profile picture
Why does this reek of an article trying to get folks to sell? No thanks. SSYS and DDD for the ultimate 3D win. Hold or buy, reap the rewards later.
by the way: ark controls now more than 11% of all shares. must be because they expect no revenue growth, right?
namam75 profile picture
@FundamentalResearch they actually own close to 17% as they also manage Nikko asset managment too.
namam75 profile picture
@Michael Wiggins De Oliveira ,Thanks for balanced article. its trading at 2X this year if you take EV(excluding more than 500M cash with 65M outstanding) and if you look at estimates of 670M consensus for next year..it's much cheaper. IMHO it;s a good setup if they can deliver
You call SSYS fair valued while the CEO says revenue growth will start to be faster in 2022? lots of other 3D Printing CEOs saying same. Its the step through mass market + bridging delivery bottlenecks with 3-D printers. Ssys is debt free, has lots of cash left and growing business. So honestly, you are not invested here and calling it fair valued while 3d printing is the biggest hot topic ahead in comming times? Come on!
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