Q3 Earnings Preview for Stratasys (NasdaqGS:SSYS)

in EARNINGS/INVESTING IDEAS by

Stratasys Ltd. (NasdaqGS:SSYS) is scheduled to report Q3 earnings results on November 12, 2020.

The company is expected to report earnings of -$0.07/share on revenue of $120.4 million. The consensus earnings per share (EPS) of -$0.07/share is based on a poll of 8 analysts and represents a decline in eps of −160.1% over the same quarter last year, when the company reported earnings of $0.12/share.

The revenue forecast of $120.4 million based on a poll of 8 analysts implies a year-over-year (YoY) decline in revenue of −23.5%. Last year the company reported $157.5 million in revenue for the quarter.

Expected to report EPS of -$0.07/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $120.43 $157.46 −23.5%
EPS -$0.07 $0.12 −160.1%

Earnings Call Trends

Historically, management has exceeded analyst expectations 4 out of the last 8 tracked quarters, missed 3 quarters, and met expectations 1 quarter.

What are your expectations from Stratasys Ltd. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.20 -$0.13 −35.0% Missed
Q1, 2020 -$0.05 -$0.19 -249.5% Missed
Q4, 2019 $0.20 $0.18 −11.3% Missed
Q3, 2019 $0.12 $0.12 0% Met
Q2, 2019 $0.15 $0.16 3.2% Beat
Q1, 2019 $0.06 $0.10 65.5% Beat
Q4, 2018 $0.19 $0.21 8.0% Beat
Q3, 2018 $0.05 $0.11 102.2% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −1.5%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 5, 2020 $15.82 $15.59 −1.5% Decline
May 14, 2020 $16.35 $16.18 −1.0% Decline
February 26, 2020 $18.26 $15.15 −17.0% Decline
November 13, 2019 $20.69 $19.15 −7.4% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.78, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.78 implies a 0.3% chance of earnings manipulation.

Fundamentals And Technical Analysis

Stratasys Ltd. is currently trading at $14.69/share, up 5.1% for the day. The company is trading at approximately 65.2% of its 52-week high of $22.21/share. The company’s stock price is down −5.8% since the last earnings report and up 16.7% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 56.74 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:SSYS Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −13.47 and a forward P/E multiple of −37.42.

Stratasys Ltd.’s current share price also implies a price-to-book (P/B) multiple of 0.72. The following table summarizes some other key fundamental ratios:

Data as of November 9, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $14.69
P/E Ratio −13.5x
P/E Ratio (Fwd) −37.4x
PEG Ratio 0.0
Total Debt / Total Capital 2.3%
Levered Free Cash Flow -$35.664 million
EV / EBITDA −299.5x

Finbox

Stratasys Ltd. is a small-cap stock with a market capitalization of $770.5 million and a total enterprise value of $476.2 million. The company operates in the Information Technology sector and the Technology Hardware, Storage & Peripherals industry.

Stratasys Ltd. provides 3D printing and additive manufacturing solutions for individuals, businesses, and enterprises. Its 3D printing systems utilize its fused deposition modeling (FDM) and inkjet-based PolyJet technologies to enable the production of prototypes, tools used for production, and manufactured goods directly from 3D CAD files or other 3D content. The company offers entry-level desktop 3D printers to systems for rapid prototyping, and production systems for direct digital manufacturing. It also provides 3D printing consumable materials, including FDM cartridge-based materials, PolyJet cartridge-based materials, non-color digital materials, and color variations. In addition, the company offers GrabCAD Print software that provides job programming, scheduling, monitoring, and analytics across various 3D printing technologies; and GrabCAD Workbench, a cloud-based project data management solution. Further, it operates Thingiverse, an online community for sharing downloadable digital 3D designs; and GrabCAD Community for mechanical engineers, designers, manufacturers, and students to best practices through tutorials, discussion forums, and design/print challenges. Additionally, the company offers customer support, basic warranty, and extended support programs, as well as strategy, operations, and engineering consultancy services; leases or rents 3D printers and 3D production systems; produces prototypes and end-use parts for customers from a customer-provided CAD file; and offers plastic and metal parts for rapid prototyping and production processes, as well as related professional services, carbon-fiber based printers, and elastomeric materials. Its products and services are primarily used in the automotive, aerospace, medical, dental, education, and consumer goods markets. The company sells its products through a network of resellers and independent sales agents worldwide. Stratasys Ltd. was founded in 1989 and is headquartered in Eden Prairie, Minnesota.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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