Stratasys Releases Q1 Results, 3D Printing Stocks Tumble

Emerging Technology
3D Printing Investing

Stratasys released its Q1 financial results on May 2, which sent other 3D printing stocks tumbling, although there has been a slight recovery since then.

Stratasys Ltd (NASDAQ:SSYS), a global leader in additive technology solutions reported its financial results for the first quarter of 2018 on May 2, with its CEO calling it ‘disappointing’ and sending 3D printing stocks tumbling.

The company said that its revenue for the first quarter was $153.8 million as compared to $163.2 million for the same period last year. Stratasys generated $27.1 million in cash from operations during the first quarter and ended the period with $346.5 million in cash and cash equivalents.

The GAAP net loss for the quarter was $13 million or $0.24 per diluted share as compared to loss of $13.9 million or $0.26 per share for the same period in the previous year.

According to  Ilan Levin, CEO of Stratasys, the company does not believe that its first quarter revenue represented a fundamental change in the demand environment in North American market.

“We are disappointed with our revenue for the first quarter, which is primarily attributed to underperformance in North America related to high end system orders, specifically from customers in government and other key verticals such as aerospace and automotive,” Levin said.

At the Rapid + TCT conference that was held last month, Stratasys showcased multiple product announcements that the company claims to reaffirm their leadership in prototyping and manufacturing.

The company also announced a new partnership and customer announcements in recent months,with the most notable being the MOU it signed with SIA Engineering Company for the adoption of 3D printed production parts for commercial aviation.

According to Digital Manufacturing Trends by 3D Hubs, Stratasys Objet30 printer is the third highest rated industrial printer with a printer quality rating of 4.94 trailing Formiga P100 and HP’s Jet Fusion 3D 4200 printers.

“We are encouraged by the growing number of companies that are making significant progress in pursuing certifications for specific high value applications,” continued Levin. “Our recent collaborations deepen these efforts as our customers move towards production applications, designing and manufacturing with confidence.”

Not all of its recent announcements have had a material impact on the financial performance of Stratasys as noted by Piper Jaffray analyst Troy Jensen.

“Q1 results with product sales well below expectations. Competition is intensifying and Stratasys will likely struggle with product growth while relying exclusively on FDM and Polyjet technologies,” Jensen told investors on the research note.

Stratasys in its financial results reiterated its financial guidance with a projected revenue of $670 to $700 million for the fiscal year ending December 31, 2018. The company also said that the GAAP net loss would be of $41 to $25 million or 0.75 to 0.46 per diluted share.

Following the announcement last week, Stratasys dropped 8.6 percent while other 3D printing stocks also dropping. 3D Systems (NYSE:DDD) tumbled from $10.35 to $9.02 on May 3, which was a 1.9 percent drop. Since then, 3D Systems has made a slight recovery to $10.05 as of market close on Monday (March 7).

Voxeljet (NYSE:VJET) had a 2.9 percent drop on the same day to close at $3.47, but has since dipped even more to $3.32 as of Monday’s close. ExOne (NASDAQ:XONE) also dropped on Thursday as a result of Stratasys’ financial results to $6.85, but has since risen back up to $7.04 on Monday.

Looking ahead, global spending on 3D printing is estimated to touch $20 billion in 2020 from the projected $12 billion in 2018. Stratasys had a global revenue share of 24 percent based on a report by Context that was published earlier in the year.

As of market close on Monday, May 7, Stratasys traded at $18.62 and was up 3.62 percent over a one-day period. TipRanks has a hold rating on the stock with an analyst target price of $20.80.

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Securities Disclosure: I, Bala Yogesh, hold no direct investment interest in any company mentioned in this article.

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