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Phil, excellent comments.

The company does have competitor TDSC. They should be watched at least to see what they say about the business environment in their space. It does appear it is now tougher to sell prototyping machines, perhaps a harder ROI sale.

I also looked at what TDSC is holding as bad debt reserve on receivables - 10% of gross receivables. That same percentage would be $2.4M more on SSYS receivables. But note that FARO has a low percentage like SSYS, so perhaps TDSC has special issues.

FYI, I also posted the following comments on the Yahoo board:

I have owned SSYS in the past and kept track of it, but am very knowledgeable on FARO, a roughly similar company in many respects.

I think SSYS' performance disappointment and relatively high valuation caught up with it today, compounded by a bear market, with microcap stocks especially engineered (by the SEC) to be hedge fund victims. There may also be quality of management issues.

SSYS has a poorer short term growth outlook than Faro, probably a similar long term outlook, and 55% of the GAAP earnings per share outlook for 2008. SSYS is above 55% of FARO's price.

My sense is that the stock breaks (pre 2 for 1 split) support around $30 (now $15), tests support in the mid-$20's and won't break the next support level at $20. I will personally consider buying once more at $13 and lower.
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