Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev | Next
Author: vishal21 Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 204  
Subject: Hey Tom G, SSYS is a HG! Date: 7/14/2004 11:57 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 5
Tom, 

I propose to you SSYS is HG material. Now, not knowing all of your
criteria and not wanting to speak on your behalf, I will simply state
my case. Also, to save time on my own behalf I will assume you are
aware of the RP space. 

Some simple facts. Due to the resilience of the materials used by
SSYS's machines, consumers of these products are not just engineering
type facilities. I have actually spoken and met with our local
distributor (Hunt Valley, MD) and they have told me about all sorts of
new avenues that this product has been applied to.

Just to name just a few:
 -marketing models
 -architecture models
 -small run manufacturing
 -proof-of-principal models, with working electronics and mechanics

And even from SSYS own press-release, they state they are creating new
materials aimed at the, food, pharma, medical-equipment, and automotive
applications. As stated by another member of this board, the SSYS
products are disruptive to the market. They are in fact creating a new
market for this kind of technology. The lower cost entry and durability
of the “printed” product are the main reasons the market is moving
beyond its traditional norms. In fact I bet if you asked the average
Joe, they have no idea machines can actually do this… After all, it is
very Star Trekish…

I also have a sample part made from an SSYS machine on my desk. It
truly is very sturdy and can be abused without risk of harming it. This
cannot be said for competitive machines or technologies in this space.

Now, despite the evolving and increasing market, Dimensions is still
priced to high for mainstream use. Even though it would be cool to
fabricate whatever I need when I need, I'm not buying one for my house.
However, the price coupled with the leasing options is low enough for
some small, many mid size, and all large companies.

More importantly though, getting the product in the door of these
companies and getting them using it, will result in higher consumable
sales to those companies. Leasing is the best way to get this product
out to them. Look at HP, they know the printer market is not the
printers, it's the ink and toner cartridge sales! 

What does this mean? Don't look at this stock quarter to quarter, its
not built to perform like a TASR. In fact 99.9% of companies are not
like TASR. SSYS must be monitored over a year-to year basis. Looking,
at the past few years, its easy see the growth, large (50%+) increases
in key numbers:


yrly(M)   2000   2001   2002   2003  
   Rev    35.6   37.6   39.8   51.0   
   Net    988K   2.5    3.1    6.2
   eps    .11    .31    .37    .64   
shipped          274    463    691
backlog         .3      3.2    4.5


With respect to the competition, my simple opinion is that you follow
the leader. The 2004 Wohler's  report clearly stated who the leader NOW
is and that is all that matters. Everyone is chasing SSYS. They may get
caught, unlikely but possible, for now though they have an advantage in
their sales, durability of the end-product, a growing brand name, user
recognition and most importantly a SOLID financial picture with sound
management running the show. 

In conclusion, SSYS is in a growing market that is not still fully
defined. The company has clearly grown over the past 3 years, and all
signs point toward continued growth on the order of 30-50% a year for
the next 3-5 years. Trading at multiple equivalent to the growth rate
is not unreasonable and should be expected. As stated in previous reply
to me on different board, I believe their is visibility for this to be
have a $40-50 stock price in 3 years time. 

-Vishal

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev | Next

Announcements

Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Post of the Day:
Value Hounds

Considerable Headwinds for Profire Energy?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement