What analysts are saying about Stratasys, Capella

Investors in Stratasys Inc., a maker of three-dimensional modeling printers, were looking for encouraging news about a sales relationship between the company and Hewlett-Packard Co.

They didn't get it. Stratasys CEO Scott Crump said in the company's earnings release last week: "We continue to make incremental progress in expanding our agreement with HP for the sale and distribution of our proprietary 3D printers."

The company delivered second-quarter earnings that were up 71 percent and sales were up 25 percent. But the damage was done. The stock dropped 26 percent on Wednesday and was down another 6 percent Thursday.

Steve Dyer, an analyst with Craig-Hallum Capital Group in Minneapolis, told the Star Tribune high expectations for the HP relationship were priced into the stock. "There's now a lot of uncertainty around the timing of an HP worldwide rollout, or whether it will happen at all," he said.

Capella Education's second-quarter results were mostly in line with analysts' expectations but the company said third-quarter revenue is expected to decline 2.5 to 4 percent. Barrington Research analysts Alexander Paris Jr. and Joe Janssen wrote "despite an attractive valuation, we remain on the sidelines as the stock lacks a near-term catalyst." The duo likes the management team and Capella's "high-quality reputation." They have a "Market Perform" rating on the stock and will consider an upgrade when a price catalyst emerges.

PATRICK KENNEDY