3D Systems and Stratasys recently released their first-quarter 2021 reports. (3D Systems' results are here.) Let's compare the two 3D printing companies' results metric for metric.
Keep in mind that qualitative factors can be just as important as quantitative ones, and we're looking at just one quarter's worth of data. Even with these caveats, however, the findings from this exercise should help you make investing decisions in the 3D printing space.
Image source: Getty Images.
Revenue
|
Company |
Q1 2021 Results |
|---|---|
|
3D Systems (DDD +2.38%) |
$146.1 million, up 7.7% from the year-ago period (and up 17%, excluding the impact of divestitures) |
|
Stratasys (SSYS +0.12%) | $134.2 million, up 1% from the year-ago period |
Data source: Company earnings reports.
Advantage: 3D Systems
3D Systems easily wins this category since its year-over-year revenue growth was the best. Its healthcare segment is carrying the load, as its sales surged 39%, while the industrial segment's sales fell 12% (though they rose 1% excluding the impact of divestitures).
In 2020, both companies were hurt from the fallout from the COVID-19 pandemic as many customers and potential customers in the industrial sector paused their buying. The crisis is still negatively impacting their businesses to some degree.
For context, in the fourth quarter of 2020, 3D Systems' revenue grew 2.6% and Stratasys' revenue fell 13% year over year. For full-year 2020, 3D Systems and Stratasys posted year-over-year revenue declines of 12% and 18%, respectively.
GAAP earnings per share
|
Company |
Q1 2021 Result |
|---|---|
|
3D Systems | $0.36, up from ($0.17) in the year-ago period |
|
Stratasys | ($0.32), up from ($0.40) in the year-ago period |
Data source: Company earnings reports. GAAP = generally accepted accounting principles.
Advantage: 3D Systems
3D Systems gets the gold medal here, as it generated a GAAP profit and Stratasys did not.
Adjusted EPS
|
Company |
Q1 2021 Result |
|---|---|
|
3D Systems | $0.17, up from ($0.04) in the year-ago period |
|
Stratasys | ($0.06), up from ($0.19) in the year-ago period |
Data source: Company earnings reports.
Advantage: 3D Systems
Once again, 3D Systems is the victor. Adjusted for one-time items, its bottom line was positive, while Stratasys' was not.
That said, it's a positive that Stratasys' loss per share narrowed considerably from the year-ago period.
Adjusted gross margin
|
Company |
Q1 2021 Result |
|---|---|
|
3D Systems | 44%, up from 42.7% in the year-ago period |
|
Stratasys | 46.7%, down from 48.4% in the year-ago period |
Data source: Company earnings reports.
Advantage: Stratasys
Stratasys wins this category, but not by as much as it often does.
A higher gross margin relative to a competitor with a similar business can reflect stronger pricing power.
Liquidity -- operating cash flow and cash on hand
|
Company |
Q1 2021 Results |
|---|---|
|
3D Systems |
|
|
Stratasys |
|
Data source: Company earnings reports.
Advantage: Tie
This category is not cut and dry. Stratasys has much more cash on hand than 3D Systems -- and this huge cash pile gives it the edge in making acquisitions.
On the other hand, 3D Systems did better in generating cash from operations. The fairest way to gauge cash-generating power is to take revenue into account. That is, to divide cash from operations by revenue. 3D Systems turned 19.5% of its revenue dollars into cash from operations, with Stratasys trailing at 17%.
Research and development spending
|
Company |
Q1 2021 Result |
|---|---|
|
3D Systems |
$16.6 million, or 11.4% of revenue |
|
Stratasys |
$20.6 million, or 15.4% of revenue |
Data sources: company earnings reports.
Advantage: Stratasys
Stratasys spent a higher percentage of its revenue on research and development, which is usually the best metric to gauge this type of spending. It also spent a higher absolute amount on R&D.
Investing in R&D is critical for companies in the technology realm if they want to stay competitive.
The winner is... 3D Systems.
Score: 3D Systems -- 3.5 points; Stratasys -- 2.5 points
Keep in mind the two caveats mentioned at the top of this article: Qualitative factors can be as important as quantitative ones, and we only considered one quarter's results. Moreover, we also didn't look at stock valuations.
Given that 3D Systems' business has recently been performing better than Stratasys', it's no surprise that its stock has also been performing better. In 2021, 3D Systems stock is up 113% through May 14, while Stratasys stock is down 4.5%. The S&P 500 returned 11.7% over this period.
