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On Monday, Cantor Fitzgerald analyst Troy Jensen reaffirmed an Overweight rating and a $12.00 price target for Stratasys Inc. (NASDAQ: NASDAQ:SSYS), following the company’s announcement of a significant investment from Fortissimo Capital. According to InvestingPro data, Stratasys currently maintains a strong financial position with more cash than debt on its balance sheet and a healthy current ratio of 3.07. The Israeli private equity fund plans to invest $120 million in the 3D printing company by purchasing approximately 11.7 million newly issued ordinary shares at $10.30 per share. This transaction price is at a 10.6% premium over Stratasys’ closing market price on January 31, 2025.
Stratasys disclosed that the investment by Fortissimo Capital will represent about 14% of its ordinary shares. Once the transaction is completed, Fortissimo will hold approximately 15.5% equity interest in Stratasys, considering its 1.5% ownership prior to the new investment. Additionally, the agreement between Stratasys and Fortissimo includes an 18-month lock-up period. With a current market capitalization of $665 million, InvestingPro analysis indicates that Stratasys is currently undervalued, suggesting potential upside for investors.
The expected closure of this transaction is in the second quarter of 2025, pending a review by the Committee on Foreign Investment in the United States (CFIUS). Jensen noted that the $10.30 per share transaction price corresponds to an enterprise value to sales (EV/Sales) multiple of 0.78x, based on Stratasys’ projected revenue of $600 million for the year 2025.
Jensen believes that the investment by Fortissimo, a fund known for its focus on growth, will strengthen Stratasys’ financial position. This bolstered balance sheet is anticipated to support Stratasys in pursuing both organic growth and capturing inorganic growth opportunities. For deeper insights into Stratasys’s growth potential and comprehensive financial analysis, investors can access the detailed Pro Research Report available on InvestingPro, which covers over 1,400 US equities with expert analysis and actionable intelligence.
In other recent news, Stratasys has been making significant strides in its operations and partnerships. The 3D printing company reported a preliminary adjusted net income for the fourth quarter between $8.1 million and $8.6 million, surpassing the consensus estimate. This positive financial development coincides with Fortissimo Capital’s agreement to acquire approximately 14% of Stratasys, which is expected to close in the second quarter.
Stratasys has also solidified its relationship with NASCAR, becoming the exclusive provider of 3D printing technology for the racing authority. This strategic partnership aims to enhance NASCAR’s design and manufacturing processes. Additionally, Stratasys extended its partnership with Joe Gibbs Racing, one of NASCAR’s most successful teams, for another five years, further emphasizing the company’s influence in high-performance racing.
The company also announced a collaboration with Baralan, a provider of primary packaging for the cosmetics industry. This partnership aims to revolutionize cosmetic packaging by using Stratasys’ PolyJet technology. In terms of financial projections, Stratasys expects its 2024 revenue to be between $570 million and $580 million, with slightly higher gross margins ranging from 49% to 49.2%.
Analysts at Craig-Hallum have positively updated Stratasys’ performance narrative, anticipating potential earnings increase for the company following the nearing completion of a restructuring process. These recent developments highlight Stratasys’ strategic partnerships, financial performance, and analyst expectations.
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