A month has gone by since the last earnings report for Stratasys (
SSYS Quick Quote SSYS - Free Report) . Shares have lost about 8.2% 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 Q2 Earnings & Sales Surpass Expectations
Stratasys reported second-quarter 2023 non-GAAP earnings of 4 cents per share. The bottom line jumped 100% year over year.
The company’s revenues climbed 1.6% year over year to $159.8 million. The year-over-year surge in the top line was partially offset by the divestitures of certain businesses and unfavorable foreign currency exchange rates. Quarter in Detail
Segment-wise, Product revenues were down 5.7% from the year-ago quarter to $109.1 million, primarily due to the divestiture and negative impact of foreign exchange rates. Within Product revenues, System revenues declined 17.9%, while Consumables revenues dropped 6.9%.
Revenues from Services decreased 0.5% year over year to $50.6 million. Within Service revenues, customer support revenues advanced 8% year over year. Stratasys’ non-GAAP gross profit decreased 1.8% from the year-ago period to $77.5 million. The non-GAAP gross margin expanded 90 basis points (bps) at 48.5%. Non-GAAP operating expenses declined to $72.5 million year over year from $77.4 million. As a percentage of revenues, the same shrunk 100 bps to 45.4%. The non-GAAP operating income came in at $5 million compared with the year-ago quarter’s income of $1.9 million. The margin expanded by 190 bps to 3.1%. Also, adjusted EBITDA grew 43% to $10.6 million. Balance Sheet & Other Details
Stratasys exited the second quarter with cash and short-term deposits of $205.4 million compared with $287.6 million witnessed at the end of the previous quarter.
As of Jun 30, 2023, there was no long-term debt. During the June-ended quarter, the company utilized operating cash flow of $23.2 million. FY23 Outlook
For 2023, management projects revenues between $630 million and $670 million and non-GAAP earnings in the range of 12-24 cents per share. The company projects a gross margin between 48% and 49%. Non-GAAP operating margin is expected in the range of 2.5-3.5%.
Stratasys estimates 2023 non-operating expenses in the range of $290-$300 million. Adjusted EBITDA is forecasted in the band of $35-$50 million. How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -85.71% due to these changes.
At this time, Stratasys has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, 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 F. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Stratasys has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.