Stratasys Earnings Preview

Stratasys (Nasdaq: SSYS  ) will try to beat its earnings estimates for the third consecutive quarter. The company will unveil its latest earnings on Wednesday, July 27. Stratasys is a worldwide manufacturer of three-dimensional printers and high-performance rapid prototyping (RP) systems for the office-based RP and direct digital manufacturing markets.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Stratasys, with four of seven rating it hold. Analysts don't like Stratasys as much as competitor Mercury Computer Systems overall. Eight out of 10 analysts rate Mercury Computer Systems a buy, compared with one of seven for Stratasys. Analysts haven't adjusted their rating of Stratasys for the past three months.
  • Revenue forecasts: On average, analysts predict $39.1 million in revenue this quarter. That would represent a rise of 30.2% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.21 per share. Estimates range from $0.19 to $0.22.

What our community says:
CAPS All-Stars are solidly behind the stock, with 97.1% awarding it an "outperform" rating. The community at large agrees with the All-Stars, with 94.7% assigning it a rating of "outperform." Fools are gung-ho about Stratasys and haven't been shy with their opinions lately, logging 111 posts in the past 30 days. Even with a robust four out of five stars, Stratasys' CAPS rating falls a little short of the community's upbeat outlook.

Management:
The company raised its gross margin by 12.2 percentage points in the last quarter. Revenue rose 49.2%, while cost of sales rose 18.3% to $16.1 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters. 

Quarter Q1 Q4 Q3 Q2
Gross Margin 53.2% 50.9% 48.6% 49.1%
Operating Margin 18% 18.2% 13.4% 13.4%
Net Margin 14.5% 12.7% 10.5% 7.8%
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