3D Systems Corporation (NYSE:DDD) shares have gained more than 40% over the last 12 months, while Stratasys, Ltd. (NASDAQ:SSYS) has rallied about 33%. On Monday, Goldman Sachs initiated coverage on the two stocks. Analyst Samuel Eisner rated 3D Systems Neutral with a price target of $63. However, Stratasys received a Buy rating with $146 price target.
3D Systems don’t have solid growth opportunity in consumer 3D printing
Goldman Sachs’ price target suggests a 31% upside for 3D Systems Corporation (NYSE:DDD), and about 47% upside for Stratasys, Ltd. (NASDAQ:SSYS) from its current price. Though the Rock Hill, South Carolina-based company continues to dominate the 3D printing market, the industry hasn’t matured enough yet for analysts to get behind the stock completely, noted Samuel Eisner. He cited the risk of integrating several technologies.
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On March 31, UBS analysts initiated coverage of 3D Systems Corporation (NYSE:DDD) with a Neutral rating and a price target of $62. Separately, Bank of America downgraded the stock to Underperform and lowered the price target from $60 to $55. Yesterday, 3D Systems joined hands with Staples, Inc. (NASDAQ:SPLS) to offer 3D printing services at retail stores.
Eisner said he doesn’t see significant market opportunity in consumer 3D printing despite the recent hype. Goldman Sachs estimates that the total addressable market for 3D Systems Corporation (NYSE:DDD) will be $40 billion over the next 15-20 years. And a big chunk of growth will come from rapid prototyping in automotive, aerospace, and healthcare sectors.
Why Goldman is more optimistic about Stratasys than 3D Systems
Goldman Sachs prefers Stratasys, Ltd. (NASDAQ:SSYS) over 3D Systems Corporation (NYSE:DDD) in the short to medium-term. The research firm said Stratasys has a solid presence in the industrial end markets with its PolyJet and Fused Deposition Modeling platforms. Samuel Eisner said Stratasys also has the potential to gain a larger share of aftermarket revenue by leveraging its RedEye business. Earlier this month, UBS analysts raised their price target on Stratasys from $125 to $130.
3D Systems Corporation (NYSE:DDD) shares soared 2.53% to $47.43, and Stratasys, Ltd. (NASDAQ:SSYS) went up 0.50% to $97.26 in early trading session Tuesday.