Analysts were out pounding the table on tech giant Apple Inc. (NASDAQ:AAPL) and 3D printing firm Stratasys, Ltd. (NASDAQ:SSYS), highlighting competitive strengths for each. While one analyst explains why payment platform Apple Pay is the winner over Android’s, the other initiates coverage on Stratasys due to its favorable market position and long term potential.
Top analyst Gene Munster of Piper Jaffray weighed in on tech giant Apple, commenting on the launch of payment platform Apple Pay. The analyst notes that the technology is off to a slow start, stating that only 20% of new iPhones activated the payment processing technology according to the last earnings report. However, Munster believes that compared to Android Pay, which uses software rather than hardware, Apple Pay is the better of the two. Munster notes that Apple Pay is more secure than Android pay, as transactions have to pass more levels of security before being processed. He also notes that Apple Pay has better communication systems with merchants, though Android pay gives third parties easier payment offerings.
Apple Pay uses a Secure enclave/secure element inside iOS, which is encrypted and inaccessible to Apple. Android uses HCE where the user’s information is stored in the cloud and not on the device itself. While other payment options such as Capital Wallet and Venmo offer users a similar payment experience, the analyst still believes that Apple Pay dominates. He states, “We believe that Apple Pay will offer the most seamless payment experience on iOS regardless of whether it is in-app, in-browser, or in-store.”
The analyst reiterates an Overweight rating on the stock with a price target of $153.
Gene Munster is ranked #4 out of 3,951 analysts on TipRanks. He has a 63% success rate recommending stocks with an average return of 17.9% per recommendation.
Out of the 36 analysts who have rated the company in the past 3 months, 86% are bullish, 3% are bearish, and 11% remain on the sidelines. The average 12-month price target for the stock is $125.71, marking a 27% upside form current levels.
FBR analyst Holden Lewis (formerly from Oppenheimer) initiated coverage of Stratasys, commenting on several positive factors about the company and its “top player” position in the additive manufacturing industry. The analyst states, “Additive manufacturing’s future is bright… we think Stratasys stands to gain.” The analyst also believes the company’s technological strengths, specifically pointing to mock-up/functional prototyping, enables it to handle any competitive threats better than its new companies and peers.
In the near-term, the analyst believes Stratasys will benefit from “unusually easy comps” in 2016 due to MakerBot sales and margins. Lewis notes that EPS is likely to have reached a bottom in 2015, assuming that demand and profit issues are fixed. He explains further, “In that case, we think Stratasys could have more P&L leverage than other large additive names and believe that it could realize this sooner.”
Regarding general industry trends, the analyst notes that “Additive’s strong future seems indisputable.” He continues, “The technology has real advantages over other established machine tools and is massively underutilized.” He also points to industry data which states 30% y/y growth in the additive sector. The analyst predicts similar growth trends going forward for the next 6 years, which “should be a powerful long0term tailwind in Stratasys’ sails.” According to the analyst, the company is undervalued even with macro and internal issues being reflected in shares. Compared to main competitor 3D Systems, Lewis notes that Stratasys is undervalued and has great long-term potential.
The analyst initiates coverage on the stock with an Outperform rating and $29 price target.
According to TipRanks, out of all the analysts who have rated the company in the past 3 months, 33% gave a Buy rating, 33% gave a Sell rating, and 33% remain on the sidelines. The average 12-month price target for the stock is $25.63, marking a 16% upside from where shares last closed.