Back to top

Analyst Blog

Stratasys Ltd. (SSYS - Analyst Report) is set to report fourth-quarter 2013 results on Mar 3. Last quarter, it posted a negative surprise of 6.67%. Let’s see how things are shaping up for this announcement.

Factors This Past Quarter

Stratasys’ third-quarter results were encouraging as it reported better-than-expected sales on the back of solid performances by its Product and Services segments. However, margins were impacted by the MakerBot acquisition and incremental investments.

Although these investments are expected to impact margins in the short run, product launches and global expansion will help Stratasys in the long run to generate incremental sales.

Moreover, the 3D printing market presents a favorable long-term opportunity as a large number of engineers, designers, architects and entrepreneurs are resorting to 3D solutions for their primary designing. Moreover, Stratasys has a huge installed base of 3D printing systems. Therefore, the company should be able to sell related consumables.

Nonetheless, as the company operates in a high-cost business segment, competition from big and small players like 3D Systems Corp. (DDD - Analyst Report) adds to the company’s concerns. The prevailing economic uncertainty, especially in Europe is affecting the company’s volumes. Some customers are delaying their purchases owing to the current economic condition.

Earnings Whispers?

Our proven model does not conclusively show that Stratasys is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 41 cents. Hence, the difference is 0.00%.

Zacks Rank: Stratasys’ Zacks Rank #5 (Strong Sell) when combined with a 0.00% ESP makes surprise prediction difficult.  We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stock to Consider

Here are some companies to consider as our model shows these have the right combination of elements to post an earnings beat this quarter:

AutoZone, Inc. (AZO - Analyst Report) has earnings ESP of +1.62% and carries a Zacks Rank #2 (Buy).

zipRealty Inc. (ZIPR - Snapshot Report) has earnings ESP of +6.67% and carries a Zacks Rank #2.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%