Stratasys Ltd. (SSYS - Free Report) is set to report third-quarter 2016 results on Nov 15. Last quarter, the company posted a positive earnings surprise of 114.29%. Notably, the stock has surpassed the Zacks Consensus Estimate in the trailing four quarters with an average positive surprise of 65.45%.
Let's see how things are shaping up for this announcement.
Factors at Play
Stratasys is one of the leading 3D printing solution providers. The 3D printing market presents a favorable long-term investment opportunity as a large number of engineers, designers, architects and entrepreneurs are resorting to 3D solutions for primary designing and product modeling. Being the industry leader in 3D printing, we believe that growing demand across different sectors will drive Stratasys’ third-quarter results.
Stratasys has entered into several strategic partnerships with the likes of The Boeing Co., Ford Motor Co. and Siemens to tap this opportunity. Going forward, the company’s sustained focus on launching new products and entering into strategic partnerships will drive its revenues in the to-be-reported quarter results.
Additionally, its efforts toward turning around MakerBot’s performance are encouraging. The initiatives will help Stratasys to gain more market share as the prospect of 3D printing industry appears bright.
Nonetheless, some customers are delaying their purchases owing to the current economic conditions. In the 3D printer business, the majority of customers have moved toward the lower-priced uPrint, which may affect the company’s margins in the to-be-reported quarter. Competition from 3D Systems Corporation (DDD - Free Report) is also a potent headwind.
Our proven model does not conclusively show that Stratasys is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Earnings ESP for Stratasys is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 12 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Stratasys sports a Zacks Rank #1. Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a couple of stocks, which you may consider as our model shows that they have the right combination of elements to post an earnings beat in their upcoming releases:
Asure Software Inc. (ASUR - Free Report) , with an Earnings ESP of +14.29% and a Zacks Rank #3.You can see the complete list of today’s Zacks #1 Rank stocks here.
Broadcom Ltd. (AVGO - Free Report) , with an Earnings ESP of +1.74% and a Zacks Rank #3.
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