It's enough to make a value investor weep. I want to buy shares of 3-D printer maker Stratasys
Calling all Trekkies
This maker of space-age, Star Trek-reminiscent "3-dimensional printers" used by companies as diverse as Nike
Yet there was good news to report as well. In Q4, the Great Recession let up the pressure on Stratasys' sales a bit; they dropped "only" 18%. Profits, meanwhile, were actually up 20% year over year, as Stratasys booked $0.12 per share in earnings. Operating cash flow perked up as well, clocking in at $11.3 million for the quarter -- 80% as much cash as Stratasys had generated in the previous three quarters combined.
And that's just the start …
So there was good news as well as bad. But absolutely none of it matters -- not Stratasys' bad full-year sales, nor its improved Q4 earnings. What matters with this company is what will happen over the next five years, when Stratasys expects to enjoy 500% sales growth as its new partnership with Hewlett-Packard
Stratasys had little new to say about the H-P collaboration in its earnings release (and that's OK -- it told us plenty last month). But it did give us a glimpse into why H-P sees so much potential in this market, describing how Autodesk
Tracking down the original press release on this project (it happened in December), I discovered that the project involved the production and assembly of 188 separate components over the course of six and a half weeks, at a cost of about $25,000. According to Autodesk, this was more than five times faster than it would ordinarily take to produce a full-size model -- at a cost savings of 97%!
Cost savings like the ones Autodesk describes make me almost believe Stratasys can achieve the near-40% annual sales growth it predicts over the next five years. The product's just that good.
I only wish the price were a little bit better.
Fool contributor Rich Smith doesn't have a position in any company named above, but Stratasys is a Motley Fool Rule Breakers selection, and The Fool owns shares of and has covered calls on Autodesk. The Motley Fool has a disclosure policy.