Demand is unlikely to get better for Statasys, Ltd’s products, says Piper Jaffray
Stratasys, Ltd. (NASDAQ:SSYS) has received a downgrade at Piper Jaffray, a financial research firm. The analyst justified his action by stating that the demand for SSYS products have hit an all-time low and as things are, it is unlikely to get better. SSYS is considered among the industry leaders in 3D printing industry and despite being a very technologically advanced industry, the demand has been meagre at best. The channel checks hint towards further weakness and demand is likely to continue to fall in the near term. Unless a new innovative feature is introduced that makes 3D printing more practical, the demand is unlikely to bounce back.
Piper Jaffray analyst, Troy Jensen did a survey regarding the recent demand trends in 3D printing space and the results were far below optimal. Not only SSYS but 3d printing industry as a whole has seen some major slowdowns in the past few months, specially, towards the end of June quarter. The market sentiment is deteriorating at a rapid pace and given the situation it is unlikely to get better. The weakness is likely to carry over to the second half of the year, however, slightly better demand is expected owing to seasonality.
The analyst advises investors to stay clear of the 3D printing industry and unless a major change occurs. SSYS is also expected to reduce guidance numbers significantly and as a result Piper Jaffray has also cut their estimates for years 2016 and 2017. The rating for the stock now goes to Neutral from Overweight, while, the price target gets trimmed down to $24 from $32.
The analyst opinion for SSYS has two Buy, four Outperform, 12 Hold, two Underperform and one Sell rating. The stock now trades at $22.50 after having declined by 3.39% since the open of the premarket.