3D printing solutions provider Stratasys’ (SSYS) subsidiary, MakerBot, has entered into a strategic partnership with SoftKinetic, a provider of 3D imaging and gesture recognition solutions.
The partnership is mutually beneficial as MakerBot would be able to expand and enhance its 3D Ecosystem and 3D Printing Platform leveraging Softkinetic’s 3D solutions. Softkinetic, on the other hand, would gain in terms of 3D camera technology, used for 3D scanning.
Moreover, SoftKinetic's DepthSense 3D Time-of-Flight (ToF) depth capture technology complements MakerBot’s Scanners and Desktop 3D Printers. It is also noteworthy that Texas Instruments and Intel use Softkinetic’s 3D products and solutions. This partnership will enable MakerBot and its parent company Stratasys to attract new clients, thereby increasing the installed base of 3D printing systems.
Over the years, Stratasys’ additive manufacturing solutions have been used by companies in the automotive, aerospace, defense, electronics, consumer goods, education and other sectors to improve product designs.
The company has also expanded its product offerings through acquisitions. The strategic acquisition of MakerBot has expanded Stratasys’ customer base and will help it to target engineers, designers, architects and entrepreneurs. We believe this combination will result in a leader in 3D industrial printing and manufacturing and positions Stratasys for growth in the 3D printing space.
The company’s focus on the 3D printing market presents a favorable long-term opportunity. Per the 2013 study by Wholers Associate, this industry is expected to continue to show double-digit growth over the next few years.
Therefore, Wohlers Associates believes that by 2017 the sale of 3D-printing products and services will reach a level of $6 billion worldwide, whereas by 2021, the industry is expected to touch $10.8 billion in revenues. As the industry leader in 3D printing, this is encouraging information for Stratasys as it will be able to grab maximum share of this market.
However, Stratasys is concerned about its high-cost business model and competition from big and small players like 3D Systems Corp. (DDD). The prevailing economic uncertainty, especially in Europe is affecting the company’s volumes. Some customers are delaying their purchases owing to the current economic conditions.
Currently, Stratasys has a Zacks Rank #3 (Hold). Some of the better-ranked stocks that investors can look at are SanDisk (SNDK) and Western Digital (WDC), both of which carry a Zacks Rank #1 (Strong Buy).
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