Is This The Most Overvalued Stock On The Market?
[Philip Lelyveld comment; as the article suggests, I think more players getting into the market, as well as new approaches to 3D printing technology, have to potential of pulling the rug out from under the valuations and market positions of these three early players.]
Stratasys (Nasdaq: SSYS) was an early pioneer in the field of "rapid prototyping" -- or what's now known as 3-D printing. (Some also now call this the "additive manufacturing" market.) Stratasys, along with rivals 3D Systems (NYSE: DDD) and ExOne (Nasdaq: XONE) are no longer a well-kept secret. The first two stocks have risen more than 350% over the past two years, and XONE has doubled in value since its early 2013 IPO.
The problem with competition is that it tends to lead to more aggressive pricing strategies across the industry. And that will make it harder for 3D Systems and Stratasys to maintain gross margins above 50%, as they did in 2012.
Also, a fast-growing industry means that many of these privately held rivals may soon look to go public (investment bankers likely see them as easy deals to get done in light of the strong investor interest). Once a flurry of new companies goes public in an industry, they use their IPO funds to speed up new product development and expand marketing efforts. So Stratasys, 3D Systems and XONE may be in a golden moment -- but, from a competitive perspective, one that may not last.
Read the full story here; http://beta.streetauthority.com/growth-investing/most-overvalued-stock-market-478066