Stratasys seen as possible target for HP
HP Inc., the traditional printing business of Hewlett-Packard, anticipates that the 3-D printing market will increase anywhere from 24 to 45 percent by 2020. The company aims to be a big player in that market with a product in development but, as of yet, has no product or revenue in that space.
At its analyst meeting on Sept. 15, HP indicated that organic development and partnerships and acquisitions would be part of its plan to grow the 3-D printing business. That was the same strategy it used to become a leader in the 2-D printing industry.
Jefferies analyst Jason North speculated in a note last week that Stratasys would make the most sense for HP as an acquisition target because of its strong reseller network and its existing printing technologies. "We see Stratasys as the most attractive of the potential candidates," North wrote.
The price for a potential acquisition might also have gotten cheaper in the past year. Stratasys Ltd. and 3D Systems Corp. of Rock Hill, S.C., have been the leaders in the emerging 3-D printer space. The share price of both stocks have nearly mirrored each other with big ups and downs. Both are currently trading down. Eden Prairie-based Stratasys was off 65 percent year to date last week, and 3D Systems was off more than 60 percent over the same time period.
Stratasys shares were trading under $29 on Friday. North has a "buy" rating on Stratasys and a 12-month price target of $44 per share.
SPS sets sights on annual sales of $1 billion
JMP Securities hosted Minneapolis-based SPS Commerce and its CEO, Archie Black, for a series of investor meetings in San Francisco last week. Investors were most interested in SPS Commerce's growth and margins, total addressable market (or revenue opportunities), mergers and acquisitions strategy and competition.
JMP has a buy rating of "market outperform" on SPS, calling it "a great example of a 'duration of growth' story."
SPS provides on-demand supply chain management software that helps businesses improve the way they manage and fulfill orders.
JMP expects SPS to continue with a recurring revenue growth rate of between 20 and 25 percent as the company looks to achieve $1 billion in annual revenue. JMP expects SPS to reach $158 million this year, up from $128 million in 2014.
According to the JMP report, Black told investors that his company can reach $1 billion in revenue without making a significant acquisition in part because he believes the company's total addressable market is $4 billion.