Stratasys
SSYS
recently announced that it has acquired RP Support (RPS), a U.K.-based based provider of stereolithography 3D printers and solutions. However, the company didn’t disclose the financial terms of the transaction.
According to
Stratasys
, “RPS’ Neo line of 3D printers feature laser beam technology that enables build accuracy, feature detail, and low variability across the full extent of a large build platform.” Rasin system-based Neo products have a wide range of properties, such as heat tolerance, chemical resistance, durability, flexibility, and optical clarity.
Therefore, the acquisition is likely to broaden Stratasys’ polymer 3D printing portfolio. In its press release, Stratasys stated that RPS’ complementary technology will further expand its “polymer suite of solutions across the product life cycle, from concept modeling to manufacturing.”
Stratasys believes the acquisition will be slightly accretive to its revenues and earnings by the end of 2021.
Stratasys, Ltd. Price
Enhancing Capabilities in Polymer 3D Printing Market
Of late, Stratasys is focusing on enhancing its capabilities in the polymer 3D printing space. In connection with this, the company, last month, completed the acquisition of Origin, a San Francisco-based 3D printing start-up.
With the acquisition, Stratasys will gain access to Origin One, Origin’s manufacturing-grade 3D printer, which uses its proprietary resin-based Programmable PhotoPolymerization (P3) technology.
The integration will enable Stratasys to deliver polymer-based additive systems to dental, medical, tooling, and selected industrial, defense, and consumer goods market. Moreover, the acquisition will help the company gain a competitive edge in the 3D-printed mass production parts market.
Additionally, the technology is expected to generate incremental annual revenues of $200 million within five years. Moreover, the acquisition is anticipated to be accretive to non-GAAP earnings growth by 2023, though it might have a dilutive effect on 2021 non-GAAP earnings.
Focusing on Expanding Product Portfolio
Stratasys’ continued initiatives to fortify its position in the 3D printing space by adding new capabilities to the 3D printing portfolio are a major growth driver.
In December 2020, Stratasys introduced several product capabilities to aid 3D printing. It launched its application programming interface (API) program, which facilitates API connectivity between the company’s Fused Deposition Modeling (FDM) 3D printers and enterprise software applications, using the GrabCAD Software Development Kit (SDK).
Additionally, the addition of three new Kimya ABS composite materials to MakerBot’s METHOD 3D printers, which boosts the performance of METHOD printers, is a major positive. Furthermore, the company introduced ultra-realistic simulation and realism with advanced bone capabilities to its J750 Digital Anatomy 3D printer.
However, the company’s top line was adversely impacted by the pandemic-induced waning demand for its hardware and consumables in the third quarter of 2020. Its product revenues decreased 21.4% year over year to $83.5 million.
Nevertheless, the expansion of Stratasys’ robust 3D printing portfolio, along with the recent acquisitions of Origin and RPS, are expected to drive customer acquisition for the company, thereby boosting its growth prospects in the near term.
Zacks Rank and Stocks to Consider
Stratasys currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector include
Zoom Video Communications
ZM
,
Facebook
FB
and
Apple
AAPL
. While Zoom sports a Zacks Rank #1 (Strong Buy), Facebook and Apple carry a Zacks Rank #2 (Buy) at present. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
The long-term earnings growth rate for Zoom, Facebook and Apple is currently pegged at 25%, 19.2% and 11.5%, respectively.
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