The Zacks Analyst Blog Highlights: Stratasys, 3D Systems, ExOne, Voxeljet and ADT
CHICAGO, Aug. 12, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Stratasys (Nasdaq:SSYS-Free Report), 3D Systems (NYSE:DDD-Free Report), ExOne Company (Nasdaq:XONE-Free Report), Voxeljet (NYSE:VJET-Free Report) and ADT Corporation (NYSE:ADT-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Monday's Analyst Blog:
3D Printing Stocks Focus on Q2 Earnings
Stratasys' (Nasdaq:SSYS-Free Report) better-than-expected second-quarter results reported last Thursday sparked a mini rally among some of the 3D printing stocks such as 3D Systems (NYSE:DDD-Free Report), The ExOne Company (Nasdaq:XONE-Free Report) and Voxeljet (NYSE:VJET-Free Report). Although share prices cooled during Friday's trade, these stocks are witnessing some renewed interest among investors.
Moreover, investors' confidence in the emerging 3D technology stocks stems from the favorable forecasts by market research firms such as Gartner, IDC and Canalys. Per Gartner, worldwide shipments of 3D printers will increase 75% to 98,065 units in 2014 and almost double in 2015. IDC predicted that the 3D printer market will witness a compound annual growth rate of 29% from 2012-2017. Canalys expects the global 3D printing market to soar from $2.5 billion in 2013 to $16.2 billion in 2018.
Major Earnings Releases
Stratasys, a Zacks Rank #3 (Hold) stock, reported better-than-expected second-quarter 2014 results last Thursday. Reported earnings and revenues also compared favorably on a year-over-year basis. The company witnessed improvement in the revenues of both Products and Services segments, which resulted from robust demand for its higher-margin products and services.
Higher demand for its MakerBot products and increased sales of higher-end Fortus and Connex systems boosted the top line. The company also reported strong demand for entry-level Mojo and uPrint 3D printers.
Buoyed by the higher adoption of its 3D technology and printers, Stratasys raised its 2014 guidance as well. The company also updated its long-term operational targets, which includes a 25% organic revenue growth (previous forecast 20% growth).
Despite these positives, higher operating expenses remain a near-term headwind. Management expects operating expenses related to sales & marketing and research & development (R&D) to increase in 2014 to supplement the growing demand for Stratasys' solutions. (For more details, please read: Stratasys Beats on Q2 Earnings & Revenues; Ups FY14 Outlook).
3D Systems, another 3D stock with a Zacks Rank #3, released second-quarter results on Jul 31, 2014. The company's top line for the quarter compared favorably year over year driven by increased demand across all its revenue segments.
As expected, margins were impacted by a significant increase in R&D and selling, general and administrative expenses. Nonetheless, encouraged by the company's revenues and increasing demand for designed and manufactured printers, management has raised its revenue guidance for fiscal 2014. (For more details, please read: 3D Systems Beats on Q2 Earnings, Raises Revenue Guidance.)
Upcoming Results
The remaining two stocks under our review, ExOne and Voxeljet, are slated to release their second-quarter results on Aug 13.
ExOne has a Zacks Rank #3 and Earnings ESP of 0.00%. It is worth noting that in the last reported quarter, the company had a negative earnings surprise of 171.43%.
Voxeljet also has a Zacks Rank #3 and Earnings ESP of 0.00%. It is worth noting that in the last reported quarter, the company posted a positive earnings surprise of 78.95%.
Performance
Over the last five days, Stratasys was the leading stock as it added about 15.55%. The biggest loser was Voxeljet recording a 5.71% decline in shares. Stratasys was the only stock in the green in terms of returns in the last six months.
Stock Price Chart (as of Aug 8, 2014)
Stocks Last 5 Days Last 6 months
SSYS 15.55% 3.26%
DDD 1.02% 27.24%
XONE 4.58% 32.52%
VJET 5.71% 56.01%
Conclusion
The 3D printing market presents a favorable long-term investment opportunity as a large number of engineers, designers, architects and entrepreneurs are resorting to 3D solutions for their primary designing and product modeling. We, therefore, believe that the adoption rate and cost control measures will be important factors determining the fortune of the players in this segment.
ADT Upped to Strong Buy on Healthy Q3 Earnings Beat
On Aug 9, Zacks Investment Research upgraded security services provider The ADT Corporation (NYSE:ADT-Free Report) to a Zacks Rank #1 (Strong Buy) from a Zacks Rank #2 (Buy) largely on the back of strong third-quarter fiscal 2014 results and healthy long-term fundamentals.
ADT's share price has steadily been on an uptrend since May 2014. Despite its strong price appreciation, ADT still has the wherewithal for the stock to climb up. The stock is currently trading at a forward P/E of 18.0x and has long-term earnings growth expectation of 8.9%.
Why the Upgrade?
ADT reported adjusted earnings of 55 cents per share versus 53 cents per share in the year-ago quarter and comfortably beat the Zacks Consensus Estimate by 9 cents. Total revenue increased 1.9% year over year to $849 million, while recurring revenues (which accounted for 92.5% of total revenue) were up 2.7% to $785 million. Recurring revenue growth was largely driven by an increase in average revenue per customer, which was up 3.9% year over year to $41.85.
ADT undertook several key initiatives to accelerate growth, improve cost efficiencies, and optimize capital structure. In order to capture a greater pie in the market, the company invested heavily in its ADT Pulse platform and launched several new products. ADT Pulse take rates climbed to 49% of customer additions, up from 28% in the year-earlier quarter.
During the quarter, ADT reduced customer attrition by initiating tighter credit screening policies, implementing resale efforts and customer loyalty programs. Revenue attrition improved 30 basis points to 13.9% on a sequential basis, while unit attrition in residential and small business channels was up 20 basis points sequentially to 13.5% due to relocations associated with the housing recovery and non-pay customers.
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