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Why Stratasys, Dick's Sporting Goods, and Teva Pharmaceutical Slumped Today

By Dan Caplinger – Nov 15, 2016 at 5:39PM

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Despite a rising market, these stocks fell. Find out why.

Tuesday was another solid day for the stock market, with all major market benchmarks posting gains on the day. A rebound in some hard-hit areas of the market, including the energy sector and emerging-market stocks internationally, helped restore some confidence in the long-term prospects for stocks in the wake of the results of the presidential election. Nevertheless, some stocks missed out on the rally, and Stratasys (SSYS 0.33%), Dick's Sporting Goods (DKS -1.38%), and Teva Pharmaceutical (TEVA -1.65%) were among the worst performers on the day. Below, we'll look more closely at these stocks to tell you why they did so poorly.

Image source: Stratasys.

Stratasys investors expect uglier results ahead

Stratasys fell more than 12% after the company reported its third-quarter financial results and predicted tougher times for the rest of the fiscal year. Revenue was down more than 6% from the year-ago quarter, and Stratasys saw its adjusted net income fall to just $100,000. More alarmingly, the 3D printing company said that it now expects adjusted net income for the full fiscal year to be between $7 million and $11 million, working out to $0.13 to $0.21 per share in adjusted earnings. The midpoint of that earnings range is barely half what investors had expected to see, and sales guidance for $662 million to $673 million doesn't fit well with the bullish case for the stock going forward. To recover, Stratasys will have to demonstrate long-term success with its innovative products in the 3D printing industry, despite facing substantial competition in the space.

Dick's shareholders aren't looking forward to the holidays

Dick's Sporting Goods fell 7% in the wake of its giving weaker guidance than expected for its fiscal fourth quarter. The company's fiscal third-quarter report included stronger adjusted net income growth than Dick's had expected in its previous guidance, and consolidated same-store sales jumped more than 5%, easily eclipsing the 2% to 3% growth that it had expected to achieve. Yet investors were apparently unsatisfied with Dick's assessment of how the holiday quarter will go, even though company guidance for adjusted earnings of $2.99 to $3.11 per share seemed consistent with the $3.05 per share consensus forecast among investors. Still, with fourth-quarter earnings guidance of $1.19 to $1.31 per share falling short of the expected $1.32 figure, some investors weren't satisfied with what amounted to a net wash for the full fiscal year. Dick's will therefore have to exceed expectations again in order to defy pessimistic investors.

Teva gives a mixed performance

Finally, Teva Pharmaceutical fell 8%. The maker of generic and brand-name pharmaceuticals reported third-quarter revenue figures that were less than what most investors had expected, and even though earnings were largely consistent with expectations, Teva relied largely on acquisitions in order to generate growth. Poor conditions in the U.S. outweighed strength in Europe, and the company's guidance for the fourth quarter wasn't as strong as some had hoped. Specifically, guidance for adjusted earnings of $1.34 to $1.44 per share was weaker than the $1.42 per share consensus forecast, and investors' projections for $6.48 billion in sales would be toward the very top of the $6.2 billion to $6.5 billion guidance range Teva gave. Going forward, Teva has to hope that conditions in the U.S. market improve in order to help spur greater long-term growth in the future.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Stratasys and Teva Pharmaceutical Industries. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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