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HP 3D Printers A Disruptor, Not A Slam On 3D Systems, Stratasys

The entry of HP ( HPQ ) into the 3D printer market is a disruptive force against 3D Systems ( DDD ) and Stratasys ( SSYS ), but it’s not an overwhelming slam, as the two market leaders have time to react, say analysts. HP’s entry is a “negative” for 3D Systems and Stratasys, but it’s “been expected and the real competitive impact could take years to develop,” wrote Pacific Crest Securities analyst Weston Twigg in a research note late Tuesday. The long-awaited entry of HP into the 3D printer market began Tuesday, with partners that include Nike ( NKE ), Autodesk ( ADSK ), ProtoLabs ( PRLB ) and Materialise ( MTLS ). HP said the printers are 10 times faster and half the cost of current 3D printing systems. HP is offering two 3D printers, one for prototyping and the other for prototyping and short-run manufacturing needs. HP has vast resources and a strong desire to turn 3D printing into a growth business, Twigg wrote. “The technology could be disruptive, and customers have shown a high desire to partner with HP on the development of the printer,” he said. The HP announcement is a “modest positive” for Materialise, a 3D printer maker that is partnering with HP on software and other areas, Twigg said. It’s also a modest positive for ProtoLabs, which focuses on the commercial market and offers industrial 3D printing as a service. Though not a direct competitor, Proto Labs is a close peer to 3D Systems and Stratasys and can quickly adopt HP printers if it makes economic sense, as Proto Labs is building out its additive manufacturing service bureaus. Sales of 3D printers totaled $5 billion last year, according to HP. It expects to ship and recognize 3D printing revenue by the Oct. 31 end of its fiscal 2016,  and ramp up the business in fiscal 2017. But HP does not expect 3D printing revenue to make a material revenue contribution in either year, wrote RBC Capital Markets analyst Amit Daryanani in a research note. HP’s new lineup poses a threat to 3D Systems and Stratasys in price and speed, but the threat is not overwhelming, said Piper Jaffray analyst Troy Jensen. “We do believe the aggressive pricing HP is promoting could cause pipelines to shrink over the next couple quarters as customers review HP’s printing capabilities,” Jensen wrote in a report. But select printers from 3D Systems and Stratasys “are better in certain applications,” he said. 3D printing technology is being increasingly embraced by corporations, governments and universities. The market for 3D printers, including supplies, will grow 33% to $7.3 billion and will approach $10 billion in 2017, according to Wohlers Associates, which provides technical, market and strategic analysis on the 3D printer market. HP stock fell a fraction on Tuesday but was up a fraction in midday trading in the stock market today , near 11.50. HP stock has been below its 50-day line most of this month. 3D Systems stock, up nearly 1% Tuesday, was down nearly 1.5% midday Wednesday. Stratasys stock, up nearly 2% on Tuesday, was down nearly 2% midday Wednesday.

HP Makes Long-Awaited Entry Into 3D Printer Market

The long-awaited entry of HP Inc. ( HPQ ) into the 3D printer market began Tuesday, with partners that include Nike ( NKE ), Autodesk ( ADSK ), ProtoLabs ( PRLB ) and BMW. The new printer line, called HP Jet Fusion 3D Printing Solution, “revolutionizes design, prototyping and manufacturing, and for the first time, delivers superior quality physical parts up to 10 times faster and at half the cost of current 3D print systems,” HP said in its press release . HP will compete with 3D Systems ( DDD ) and Stratasys ( SSYS ), the two largest providers of 3D printers, among others. HP is offering two 3D printers. They are the HP Jet Fusion 3D 3200 printer, designed for prototyping, and the Jet Fusion 3D 4200 printer, designed for prototyping and short-run manufacturing needs. Pricing on the 4200 model starts at $155,000 and will be delivered in late 2016. Pricing on the 3200 model starts at $130,000, with deliveries in 2017, HP said. Besides Autodesk, software partners include   Materialise ( MTLS ) and Siemens. Besides Nike, BMW and Proto Labs, co-development partners and strategic partners also include  Jabil  Circuit ( JBL ), Johnson & Johnson ( JNJ ) and Shapeways. HP stock fell in the stock market today , to 11.53. HP stock has been below its 50-day line most of this month. 3D Systems stock, though, rose nearly 1% Tuesday, and Stratasys stock rose nearly 2%.

Stratasys Earnings Beat Gives Short Lift To 3D Printer Market

Stratasys ( SSYS ) posted a first-quarter earnings beat before the market open Monday, sending its stock — and that of rival 3D Systems ( DDD ) — up in early trading, though both stocks reversed by midday even though Stratasys’ sales guidance for the year also edged above views. Stratasys reported revenue of $167.9 million, beating the consensus estimate of $164.8 million by analysts polled by Thomson Reuters. That’s down 3% year over year but marks an improvement from the 20% year-over-year drop in the previous quarter. Earnings per share minus items of a penny fell from a 4-cent profit in Q1 2015 but still beat Wall Street expectations for a 4-cent loss. Stratasys beat on earnings during a difficult period for 3D printer companies. Competitor 3D Systems reported Q1 earnings Thursday that showed a third straight quarter of year-over-year declines in sales and missed Wall Street expectations. Stratasys stock jumped as much as 12% early on the stock market today , but it ended the day down 1.3%, at 20.79. 3D Systems stock rose as much as 2% at the open, but it ended the day down 3.7%, at 12.68. Another 3D printer maker,  Voxeljet ( VJET ), fell 1.9% on Monday. Stratasys said it sold 5,125 3D printing and additive manufacturing systems during the quarter. “Although the overall market environment remains challenging, we made significant progress in improving our operating efficiency during the first quarter,” company CEO David Reis said in the earnings release. “We believe the recent refinements to our operating structure will make us more productive and better position us for future growth.” Stratasys guided 2016 revenue at $700 million to $730 million, with the midpoint slightly ahead of the analyst consensus estimate of $713 million. It projects EPS minus items of 17 cents to 43 cents, with the midpoint meeting views of 30 cents. For 2015, Stratasys posted EPS ex items of 19 cents on sales of $696 million. Piper Jaffray maintained an overweight rating on Stratasys stock, with a price target of 32. “Following the upbeat results, we remain confident in Stratasys’ future and bullish on its long term opportunity,” Piper analyst Troy Jensen wrote in a research note. “Although we believe it will take 1-2 additional quarters to see system sales improve, we believe interest continues to grow and are confident printer sales will show significant improvement in the second half.” Cowen analyst Robert Stone maintained a buy rating and price target of 23 on Stratasys stock, but he said overall visibility was still limited.