It has been about a month since the last earnings report for Stratasys (SSYS Quick QuoteSSYS - Free Report) . Shares have lost about 10.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Stratasys due for a breakout? 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 drivers.

Stratasys Q1 Earnings and Revenues Surpass Estimates

Stratasys reported first-quarter 2022 non-GAAP earnings of 2 cents per share, which compared favorably with the Zacks Consensus Estimate of a loss of 4 cents per share. The bottom line came in higher than the year-ago quarter’s loss of 6 cents per share.

The company’s revenues jumped 22% year over year to $163.4 million and surpassed the consensus mark of $157.8 million. This year-over-year top-line growth was driven by strength in the Systems performance.

Quarter in Detail

Segment-wise, Product revenues were up 25.2% from the year-ago quarter to $113.1 million. Within Product revenues, System revenues climbed 36.7%, while Consumables revenues jumped 16.1% year over year.

Revenues from Services increased 14.8% year on year to $50.4 million. Within Service revenues, customer support revenues advanced 10.1% year over year.

Stratasys’ non-GAAP gross profit increased 14.8% from the year-ago period to $77.4 million. Consequently, non-GAAP gross margin expanded 60 basis points (bps) to 47.3%.

Non-GAAP operating expenses flared up 15.5% year on year to $75.3 million. As a percentage of revenues, it contracted 250 bps to 46.1%. Non-GAAP operating income of $2 million against the year-ago quarter’s loss of $2.6 million. However, the margin rose by 310 bps to 1.2%.

Adjusted EBITDA soared 131.4% to $8.1 million.

Balance Sheet & Other Details

The company exited the first quarter with cash and short-term deposits of $475.6 million compared with the $502.2 million witnessed at the end of the previous quarter.

As of Mar 31, 2022, there was no long-term debt.

During the January-March quarter, the company utilized an operating cash flow of $16.1 million.

Outlook

For 2022, management projects revenues between $685 million and $695 million. Stratasys anticipates non-GAAP earnings in the range of 14 cents to 19 cents per share in 2022.

Stratasys estimates 2022 operating expenses to increase by $20-$25 million from the 2021 level, primarily due to the ongoing investments in new products associated with higher revenues.

For 2022, Stratasys expects the non-GAAP operating margin to be slightly above 2%, with small losses in the first half and profitable contributions in the second half of the year.

Adjusted EBITDA is forecast in the band of $38-$41 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review.

The consensus estimate has shifted 24.32% due to these changes.

VGM Scores

At this time, Stratasys has an average Growth Score of C, a grade with the same score on the momentum front. 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Stratasys has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.