Why Stratasys Shares Surged

Before you go, we thought you'd like these...
Before you go close icon

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Stratasys climbed 6% today after JPMorgan upgraded the 3-D printing technologist from neutral to overweight.

So what: Along with the upgrade, analyst Paul Coster reiterated his price target of $101.50, representing about 9% worth of upside to yesterday's close. The stock has slumped recently on management's public offering of nearly 5.2 million shares, but Coster thinks that it provides investors with a juicy entry point given Stratasys' strong position in the rapidly growing 3-D printing space.

Now what: JPMorgan said that Gartner's recent forecast of 3-D printer growth (95% CAGR over the next five years) suggests strong upside to its own outlook (20%-25% CAGR), and that Stratasys is in a particularly good spot to benefit. "Stratasys has achieved a sustainable competitive position in the early adoption phase of a massive, diversified market for 3D printing solutions and is a pure-play for investors seeking exposure to the manufacturing renaissance theme," noted the firm. Of course, with the stock up about 70% from its 52-week lows and trading at a forward P/E of 40, I'd wait for some of the enthusiasm to fade again before jumping in.

A Look Into the Future of 3-D Printing
If someone asked you, "Why invest in 3D Systems?" Could you truly answer them? To be honest, few investors could. That's because most of the company's secrets—the ones that make savvy market watchers rich—often fly below the radar. If you want an edge on other 3D Systems investors, be sure to check out "5 Secrets to 3D Systems' Future" from The Motley Fool. This 100% FREE guide includes actionable advice that you can put to use right now! Just click here now for instant access!

The article Why Stratasys Shares Surged originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Stratasys. The Motley Fool owns shares of Stratasys. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

People are Reading