Why Stratsys (SSYS) Stock Is Up Today

NEW YORK (TheStreet) -- Stratasys (SSYS) was gaining 5.2% to $92.79 Thursday following a note from BB&T praising demand for MakerBot.

In the note BB&T said that traffic to the MakerBot retail store in Boston indicates that demand is very deep. The analyst firm said that 35% organic growth for the company through 2016 isn't overly aggressive.

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TheStreet Ratings team rates STRATASYS LTD as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate STRATASYS LTD (SSYS) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and compelling growth in net income. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • SSYS's very impressive revenue growth greatly exceeded the industry average of 4.3%. Since the same quarter one year prior, revenues leaped by 55.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SSYS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.54, which clearly demonstrates the ability to cover short-term cash needs.
  • STRATASYS LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, STRATASYS LTD swung to a loss, reporting -$0.70 versus $0.43 in the prior year. This year, the market expects an improvement in earnings ($2.20 versus -$0.70).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Computers & Peripherals industry and the overall market, STRATASYS LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • In its most recent trading session, SSYS has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • You can view the full analysis from the report here: SSYS Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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