Dougherty & Co Downgrades Stratasys Inc. (SSYS) to Neutral
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Dougherty & Co downgraded Stratasys Inc. (NASDAQ: SSYS) from Buy to Neutral and removed its price target (prior $90.00). Analyst Andrea James thinks the company is facing market growth challenges, and she does see an immediate fix.
"We are downgrading our rating to Neutral as SSYS will need time to work through problems and build back credibility. Our view of the challenges: Corporate buying managers are delaying purchases while they anticipate HP's multi-jet fusion product in 2016. 3D printing has been hyped so much in the marketplace that distributors see a disconnect between customer expectations and the reality of what 3D printers can do. Stratasys tried to scale MakerBot's distribution and product diversity too quickly, leading to quality-control problems," said James.
"US dollar strength is a headwind. Many of these challenges are addressable, but they will compress the stock's trading multiple and challenge SSYS's stated 25% organic growth expectations in FY15 and FY16. SSYS is the market leader in the space and should maintain that leadership," added the analyst.
Shares of Stratasys Inc. closed at $51.30 yesterday.
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