NEW YORK (TheStreet) -- Stratasys (SSYS) shares are up 2.1% to $122.43 on Thursday after having coverage initiated with an "overweight" rating and $135 price target by analysts at Morgan Stanley (MS) .
The 3-D printing company's new price target represents a 10.2% increase over the stocks's current price.
The firm believes that the company is best positioned to take advantage of market growth in the burgeoning industry.
TheStreet Ratings team rates STRATASYS LTD as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate STRATASYS LTD (SSYS) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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, compelling growth in net income, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SSYS's very impressive revenue growth greatly exceeded the industry average of 9.3%. Since the same quarter one year prior, revenues leaped by 67.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving 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 4.58, which clearly demonstrates the ability to cover short-term cash needs.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Computers & Peripherals industry. The net income increased by 93.8% when compared to the same quarter one year prior, rising from -$2.80 million to -$0.17 million.
- The gross profit margin for STRATASYS LTD is rather high; currently it is at 65.48%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -0.09% is in-line with the industry average.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- You can view the full analysis from the report here: SSYS Ratings Report