A month has gone by since the last earnings report for Stratasys (SSYS Quick QuoteSSYS - Free Report) . Shares have added about 18.1% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Stratasys due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Stratasys Q1 Earnings Beat Estimates

Stratasys reported first-quarter 2021 results, wherein it outpaced earnings and revenue estimates.

The company reported a non-GAAP net loss of 6 cents per share in the first quarter. The Zacks Consensus Estimate was pegged at a loss of 8 cents per share. Moreover, the company’s bottom-line figure was narrower than the year-ago quarter’s net loss of 19 cents per share.

Stratasys’ revenues of $134.2 million inched up 1% year over year. The revenue figure also surpassed the consensus mark of $133 million. This year-over-year growth in the top line reflects strength in System performance.

Stratsys CEO Dr. Yoav Zeif said, “3D printing is migrating from being primarily a prototyping tool to providing full-scale, digital manufacturing platforms at mass production levels. With our focused business model, we continue to make progress on our strategy to grow our manufacturing applications, which will solidify our position as the first choice in polymer 3D printing.”

Q4 Details

Segment-wise, Product revenues were up 8.6% from the year-ago quarter to $90.3 million. Within Product revenues, System revenues surged 41% while Consumables revenues fell 8% year over year.

Revenues from Services declined 11.8% year on year to $43.9 million. Within Service revenues, customer support revenues dropped 2.2% year over year.

Stratasys’ non-GAAP gross profit dipped 1.7% from the year-ago quarter to $62.6 million. Non-GAAP gross margin contracted 170 basis points (bps) to 46.7%, mainly due to a higher mix of System revenues in the sales mix.

Non-GAAP operating expenses fell 10.3% year on year to $65.2 million. Moreover, as a percentage of revenues, it shrank 610 bps to 48.6%. The company’s cost-containment efforts helped minimize expenses.

Non-GAAP operating loss totaled $2.6 million compared with an operating loss of $8.4 million recorded in the prior-year quarter.

The company exited the first quarter with cash and short-term deposits of $530.4 million compared with the $299 million witnessed at the end of the previous quarter.

As of Mar 31, 2021, there was no long-term debt.

During the January-March quarter, the company generated operating cash flow of $22.8 million.

Business Outlook

For the second quarter, management projects revenues to grow in the mid-teen percentage range on a year-over-year basis.

Furthermore, Stratasys estimates 2021 operating expenses to be up $25-$30 million from the 2020 level, chiefly due to its return to the five-day-work week from the four-day strategy and the impact of recent acquisitions.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -19.05% due to these changes.

VGM Scores

At this time, Stratasys has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Stratasys has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.