NEW YORK (TheStreet) -- Shares of 3D printer maker Stratasys (SSYS) are climbing after one analyst wrote that the company was unlikely to be significantly hurt by HP's (HPQ) upcoming move into the space and another analyst predicted that Stratasys' Q3 results would meet or beat expectations.
BACKGROUND: Last Wednesday, Hewlett-Packard announced that it had developed 3D printers that are ten times faster than current models. The company said that its 3D printers would be widely available in 2016.
WHAT'S NOTABLE: On Thursday, Stratasys CEO David Reis, responding to HP's announcement, told Reuters that the rapid expansion of the 3D printing market should allow Stratasys and other current players in the sector to grow, even if competition in the space increases. Research indicates that the 3D printer market is expected to jump from $3B last year to $21B by 2020, Stratasys executives said, according to the news service.
ANALYST OPINION: HP's 3D printers will be nylon-based and are unlikely to be competitive with Stratasys' printers, which primarily utilize plastic, Piper Jaffray analyst Troy Jensen wrote in a note to investors. However, HP's printers are likely to be competitive with a number of 3D Systems' (DDD) printers, which also primarily utilize nylon, wrote Jensen. HP's printers are unlikely to generate significant amounts of revenue until the second half of 2016 or even 2017, Jensen predicted. HP's printers will have a number of weaknesses, as the maximum size of products they can build will be relatively small, and users will be required to clean the printers after each time they are used, Jensen stated. He kept a $145 price target and Overweight rating on Stratasys' stock. Meanwhile, JPMorgan analyst Paul Coster wrote in a note to investors today that Stratasys' third quarter results are likely to meet or beat expectations. Although 3D Systems recently pre-announced weaker than expected results, that company's difficulties are not being felt by other players in the space, Coster believes. Moreover, Stratasys is executing well and opening up new markets, while its growth opportunities remain strong, the analyst contended. Coster's Q3 estimates for Stratasys are slightly above consensus levels. The risk to Stratasys from HP's printers is "modest, but worth monitoring," wrote Coster, who kept a $139 price target and Overweight rating on the stock.