HP Could Cause Problems For 3D Printing Stocks
“We continue to view 3D printing as a classically disruptive technology, starting in niche markets addressing non-consumption then moving into mainstream production as the technology improves,” analyst Steven Milunovich wrote.
Impact On 3D Printing Companies
Shares of Stratasys and 3D Systems Corporation (NYSE: DDD) had surged on sequential revenue growth in 4Q and outlook for modest revenue growth in 2016. Milunovich pointed out, however, that there are growing concerns surrounding HP’s entry later this year. He added, “Although HP Inc should grow the pie over time, the initial impact could be negative for today’s leaders.”
HP could formally announce its Multi Jet Fusion offering in a few months, with availbility by the end of 2016. The analsyt believes that HP would not pursue a consumables monetization model. Instead the company may open up materials to third parties to make cost reasonable. HP would make money on hardware, services and fusing agents.
Milunovich commented that currently, Stratasys records gross margins of about 80 percent on materials, and this would come under pressure due to HP’s planned moves.
Latest Ratings for SSYS
|Oct 2016||FBR Capital||Assumes||Outperform|
|May 2016||FBR Capital||Initiates Coverage on||Outperform|
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