Stratasys ( NASDAQ: SSYS ) shares rose nearly 5% in premarket trading on Wednesday as investment firm Needham upgraded the 3D printer company, saying it is "too cheap to ignore."
Analyst James Ricchiuti moved his rating on Stratasys ( SSYS ) to buy from hold and put a $15 price target, noting that the company has beat Wall Street estimates seven of the past eight quarters and managed to deliver five consecutive quarters of positive earnings. In 2023, it may be a more challenging environment for Stratasys ( SSYS ), but this looks to be "priced into the stock" as it is trading at its lowest valuation in recent memory, Ricchiuti added.
"Stratasys has generated strong [year-over-year] Systems growth in recent quarters, including 19% in Q3 (adjusted for divestitures and on a constant currency basis)," Ricchiuti wrote.
"We believe the pending acquisition of the Covestro additive manufacturing business in Q1'23 will bolster SSYS's materials business and strengthen its overall market position," Ricchiuti added.
Ricchiuti stated out that even with the economy looking like it may tip into a recession in 2023 and previous industry and economy downturns having hit Stratasys ( SSYS ), the stock is just too cheap, trading at or near historic low levels on both book value and less than 1 times enterprise value to 2023 estimates.
The analyst also pointed out that Stratasys's ( SSYS ) product portfolio looks set for growth, with its legacy Fused Deposition Modeling and recently added printing systems seeing increased applications in a number of manufacturing and dental spaces.
In late November, Stratasys ( SSYS ) updated its fiscal 2022 outlook to include the divestiture of MakerBot .
Analysts are largely bullish on Stratsys ( SSYS ). It has a BUY rating from Seeking Alpha authors , while Wall Street analysts rate it a BUY . Conversely, Seeking Alpha's quant system, which consistently beats the market, rates SSYS a SELL .
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Stratasys rises as Needham upgrades, says it is 'too cheap to ignore'