3D Printing Stocks Are Exploding, But The Best Trade Isn't Stratasys, 3D Systems Or Voxeljet
Wednesday evening, Stratasys, Ltd. (NASDAQ: SSYS) reported earnings, announcing FY16 revenue of $700–$730 million versus the estimated $700 million, an EPS of $0.17–$0.43 versus an estimated $0.18. For Q4, the EPS came in $(0.01) versus the estimated $(0.18), while revenue came in at $173.4 million against the estimated $168.3 million.
The stock has been responding positively throughout the day, up more than 17 percent and trading around the $24.50 level.
Despite Stratasys' recent positive news, it is not the best trading idea out there in the 3D printing sector. And neither are other top names such as 3D Systems Corporation (NYSE: DDD) or Voxeljet AG (ADR) (NYSE: VJET), according to one analyst.
Check Out Materialise
According to a recent earnings recap piece, Pacific Crest's Weston Twigg favors Materialise NV (ADR) (NASDAQ: MTLS) within the space, saying the issue "continues to outperform peers," and therefore "remains our best idea in 3D printing."
Citing a Q4 beat and 2016 guidance exceeding the research firm's projections, "Materialise is demonstrating its unique position within the 3D printing segment as it benefits from high growth in its software and printing services, even as demand for 3D printers has remained soft."
Furthermore, Pacific Crest sees long-term upside for the company based on its innovations within the medical and metal environment. "[W]e expect manufacturing revenue to grow nicely over the midterm as metal printing services ramp and new verticals, such as eyewear, robot grippers and even shoewear, gain traction.
"Over the long term, Materialise should be a central figure in the transition to 3D printed prosthetics, where it provides key surgical planning software, collaborative partnerships, and printed surgical guides and implants," he added.
A key strength of Materialise over peers (from an investing standpoint) is its ability to serve a niche, a "backbone" of the space, Twigg explained.
Materialise is up 3.21 percent on the day and roughly 34 percent over the past one month.
Pacific Crest currently has an Overweight rating on the stock and a price target of $11.
Latest Ratings for MTLS
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