UBS Eases PT on Stratasys (SSYS) to $120; N-T Outlook Remains Foggy

UBS maintains its Buy rating on Stratasys (Nasdaq: SSYS) following Q1 results and trims its target price by $10 to $120.

Analyst Steven Milunovich made the following points:

• Operating margin likely bottomed

  Stratasys used the quarter's upside to ramp infrastructure-related SG&A spending tied to the launch of new MakerBot products in 2Q. Increasing sales agents likely represented the bulk of the reinvestment, which should payoff fairly quick. Leverage should gradually improve from here with full year expectations of 2013-like margins.

• Estimate mostly unchanged, setup for second-half remains solid

  Our full year estimates are mostly unchanged, only reflecting 1Q results. Although we agree with management that it is likely too early to update the full year outlook, we're slightly disappointed the company hasn't provided a sense of the impact from Solid Concepts and Harvest. Our preliminary analysis, which assumes conservative margins, shows the deals adding $0.02 to our 2014 EPS estimate and $0.16 to our 2015E.

For an analyst ratings summary and ratings history on Stratasys Inc. click here. For more ratings news on Stratasys Inc. click here.

Shares of Stratasys Inc. closed at $89.90 yesterday.

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