Stratasys Ltd. SSYS has been scaling newer heights across all its business segments. Over the past few months, the company has inked strategic partnerships as well as launched diverse products, reflecting its solid fundamentals.
The 3D printing company recently entered into a few strategic partnerships with the likes of The Boeing Co. BA, Ford Motor Co. F and Siemens. The collaborations are aimed at introducing advanced 3D printing technologies to the aerospace and automotive industries. The financial terms of the deal were not disclosed.
Adding to the slew of positives, Stratasys recently launched two new products – The Infinite-Build 3D Demonstrator and the Robotic Composite 3D Demonstrator.
These launches will help users to reduce complexities and data loss, thereby enhancing user experience and providing high-quality prints. Customers can benefit from greater accuracy and reliability, which are not otherwise available on a regular printer.
About Boeing and Ford
The Boeing Company is one of the world's major aerospace firms. The company operates in three principal segments: commercial airplanes; military aircraft and missiles; and space and communications.
Ford Motor Company produces cars and trucks. The company and its subsidiaries also engage in other businesses, including manufacturing automotive components and systems and financing and renting vehicles and equipment.
Inside the Headlines
The collaborations with Boeing and Ford for the development of the latest Infinite-Build 3-D Demonstrator is likely to reap synergistic benefits going forward. Partnering Boeing will be a positive for Stratasys. This will facilitate high printing speed, as much as ten times quicker than the existing 3D printing products. It will also enable change of materials while the printer is in-use.
On the other hand, as part of the partnership with Ford, Stratasys’ Infinite-Build machine will print large lightweight components that are as huge as a building or a size of an entire airplane. Therefore, it will help Stratasys gain competitive advantage over players like 3D Systems Corp. DDD.
Going forward, Siemens’ motion control hardware and product management software will perfectly complement the robust manufacturing expertise of Stratasys’ new Robotic Composite 3-D Demonstrator, helping the latter in innovative additive manufacturing initiatives. We believe that the collaboration will expand and enhance Stratasys’ additive manufacturing (AM) or 3D Printing Platform. Also, this association will enable Stratasys to attract new clients and strengthen its overall market position.
3D Printing Market
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. According to market research firm CONTEXT, over half a million 3D printers have already been shipped across the globe between the 1980s and mid-2015 and the industry is currently on track to ship its millionth unit by 2017. Data from the Wohlers Report 2014 revealed that the worldwide 3D printing industry is expected to grow from $3.07 billion in 2013 to $12.8 billion by 2018, and exceed $21 billion by 2020 at a CAGR of 34%.
As the industry leader in 3D printing, this is encouraging information for Stratasys as it will be able to grab a large share of this market.
To Conclude
The deal is a strategic move by Stratasys to expand its geographic reach and drive market penetration.
Both these partnership spell opportunities for Stratasys’ 3D systems business and will increase its installed base. We believe that Stratasys’ portfolio of new and innovative products will help it in the long run to generate incremental sales.
Stratasys has a Zacks Rank #3 (Hold).
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