Sunday, January 6, 2013

SSYS-What I Learned From Reading The 10K

1. SSYS's 3D printers range from $13,900 (uPrint Personal 3D) to $379,000 (Focus 900mc).
2. Sales are predominantly done by resellers with more than 100 US resellers and more than 100 International resellers.
3.Sales also include service contract which ranges from $2,000 to $49,000 annually.
4.Competitive Advantage: The 3D printers and high-performance RP systems using our FDM technology to produce prototypes and parts from industrial production-grade plastic do not rely on lasers. This affords our products a number of significant advantages over other commercially available 3D rapid prototyping technologies that rely primarily on lasers to create models. Such benefits include:  
  •  the ability to use the device in an office environment due to the absence of hazardous emissions

  • little or no post-processing

  • minimal material waste 

  • better processing and build repeatability 
5. Seasonality: Q4 strongest due to clients' capital budget cycles and sales compensation program. Q1 and Q3 historically have been weaker. 
6. Approximately 42% market share in the RP market. 
7. The HP deal has lower margin because HP uses its own resellers and SSYS has to sell to HP at a lower price. 
8. Certain raw materials are supplied by only 1 vendor. 
9. Historically, outstanding A/Rs have been concentrated in a few customers. 
10. Unit sales: 

2011: 2602

11. 2011's ASP is higher due to a favorable sales mix of higher priced systems. 

12. Management expect unit sales volume to increase faster than revenue growth in the future and expect lower margin because sales push for more affordable personal 3D systems. 

13. CAGR (10 year from 2002-2011):
Revenue: 14.66%
Unit Sales: 16.2%
Net Income: 21.18%
EPS: 24.5%
R&D: 12%

14. Tax Rate: 42% most recent 10Q but assume 35%. 
15. 2011 Net Income Margin: 13.2 %

Assuming 30% revenue growth rate for 5 years, which indicates $743 million in revenue on 12/31/2017. Pretty optimistic here. 
$743 million * 13.2% Net Income Margin: $98 million Net Income. 
$98 million/21 million shares O/S=4.60 EPS
Apply a PE of 18 (which still implies 15%-20 growth): 4.60*18= 82.8 in 5 years. 

10% IRR: $51.41
15% IRR: $41.16

Current Price: $82.25 as of 1/4/13

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