The fast-growing world of 3D printing has received another shot in the arm with Stratasys, Ltd. (NASDAQ:SSYS)'s proposed acquisition of privately owned printer-maker MakerBot. The publicly traded firm has agreed to purchase MakerBot in a stock-for-stock deal that may presage similar transactions across the broader ecosystem. Although this transaction has not yet closed, it is not expected to face significant hurdles and should be finalized within the next few months.
Stratasys, Ltd. (NASDAQ:SSYS) is one of the largest public firms that operates in the 3D printing space. As such, its moves are closely followed by tech-watchers and 3D printing hobbyists. Given the quasi-experimental nature of the industry, conservative investors may wish to approach this name with caution and conduct further research before making an investment. For more aggressive traders and investors, this deal could provide significant short-term advantages and produce lasting synergies.
Stratasys and its Competition
Stratasys, Ltd. (NASDAQ:SSYS) makes a number of products that aid a variety of manufacturing businesses as well as hobbyist end-users. Despite the rapidly growing popularity of 3D printing, Stratasys, Ltd. (NASDAQ:SSYS) has few publicly traded competitors. Many firms that operate within the space, including MakerBot, remain in the start-up phase and have yet to make public offerings. Given Stratasys, Ltd. (NASDAQ:SSYS)'s robust size relative to these firms, it makes the most sense to compare it with more established technology firms like Oracle Corporation (NASDAQ:ORCL) and Cisco Systems, Inc. (NASDAQ:CSCO).
Stratasys, Ltd. (NASDAQ:SSYS) is considerably smaller than these competitors. It has a market capitalization of about $3 billion and posted 2012 revenues of about $268 million. By contrast, Cisco Systems, Inc. (NASDAQ:CSCO) has a market cap of roughly $129 billion and took in $48 billion in 2012. With a market cap of $141.5 billion and 2012 revenues of $37 billion, Oracle Corporation (NASDAQ:ORCL) is equally impressive. The two more established firms are also far more profitable than Stratasys: Compared to Oracle Corporation (NASDAQ:ORCL)'s 2012 earnings of nearly $11 billion and Cisco Systems, Inc. (NASDAQ:CSCO)'s final take of $9.6 billion, Stratasys's slight loss of around $11.5 million is underwhelming. Of course, Stratasys, Ltd. (NASDAQ:SSYS) is a bit newer and less diversified than these other companies.
It also has a rather low price-to-book ratio of 2.03. However, its price-to-sales ratio sits near 12 and complements a forward P/E of nearly 32. By contrast, Oracle Corporation (NASDAQ:ORCL) has a higher price-to-book ratio of 3.13 and a lower P/E value of just under 10. Cisco Systems, Inc. (NASDAQ:CSCO) has a price-to-book of 2.3 and a P/E of about 11.5.