Longbow's Wittine: Don't Short 3D Systems

Longbow's Joe Wittine maintained a Neutral rating for

, saying that the company was taking steps to find the balance between growth and profitability and had already reduced its workforce by 10 percent in 4Q. Stratasys has guided to a 2016 EBIT midpoint of $30 million, versus the Street estimate of $11 million. Analyst Joe Wittine mentioned that Stratasys' strategy is to build-out application-focused solutions for auto, aero, medical and dental while continuing to focus on its core prototype market. He wrote, "Management remains willing to swallow MakerBot's losses (including sub-$1,000 printers), hoping desktop availability will foster future industry adoption." Stratasys' results confirm the results from surveys of 3DP participants that showed although there was a slowdown in industry adoption, it was stable and unlikely to decline further in 2016. Witine expects the e-prototype market to return to growth over the next few years, He believes, however, that it is unlikely to happen in the next 12 months.

experienced a stronger 4Q than Stratasys largely due to its favorable exposure beyond prototyping to direct metals printers and industry verticals, including medical. "After carrying an UNDERPERFORM rating on DDD through much of 2015, we think it is difficult to make a short case today with 3DP capex cycles steadying, cost cuts at least as aggressive as SSYS, and a slightly favorable product offering," the Longbow report noted.