3D Systems (DDD 6.25%) and Stratasys (SSYS 3.54%) recently released their third-quarter 2021 reports. (A fairly deep dive into 3D Systems' results is here.) Let's compare the two 3D printing companies' results, metric by metric.
Keep in mind that qualitative factors can be just as important as quantitative ones, and we're looking at just one quarter's results. Even with these caveats, however, the data in this article should help you make better investing decisions in the 3D printing space.
Image source: Getty Images.
Revenue
|
Company |
Q3 2021 Results |
|---|---|
|
3D Systems |
$156.1 million, up 15% from the year-ago period (and up 36%, excluding the impact of divestitures) |
|
Stratasys |
$159.0 million, up 24% from the year-ago period |
Data source: Company earnings reports.
Advantage: Tie
This one isn't clear-cut. Calling it a tie seems fair. Stratasys' revenue grew the fastest from the year-ago period. However, 3D Systems performed better when we exclude the impact from the divestitures of its non-core assets.
Both 3D printing companies performed solidly, though they had relatively easy comparables because of the pandemic. Many industrial companies were still cautious with their ordering in the third quarter of last year.
Both 3D Systems and Stratasys generated revenue that topped -- though just barely -- their revenue in the pre-pandemic period two years ago. 3D Systems' Q3 2021 revenue was 0.5% higher than its revenue in Q3 2019, though 21% higher adjusted for divestitures. Stratasys' Q3 2021 revenue edged up 1% from its revenue in the same quarter two years ago.
The healthcare vertical was the star performer for both companies, as has been the case for some time. In the third quarter, 3D Systems' healthcare revenue surged 28% (45%, adjusted for divestitures) to $76.4 million, accounting for 49% of its total revenue. Stratasys doesn't break out its results by vertical but did say in its earnings presentation that healthcare is its fastest-growing business.
GAAP earnings per share (EPS)
|
Company |
Q3 2021 Result |
|---|---|
|
3D Systems |
$2.34, up from ($0.61) in the year-ago period |
|
Stratasys |
($0.28), up from ($7.35) in the year-ago period |
Data source: Company earnings reports. GAAP = generally accepted accounting principles.
Advantage: N/A
This category is included just for information purposes. GAAP results don't strip out one-time items, so they're often not comparable. 3D Systems' result, for instance, got a big boost from the company's sale of its noncore assets. That's the only reason it's positive.
Adjusted EPS
|
Company |
Q3 2021 Result |
|---|---|
|
3D Systems |
$0.08, up from ($0.03) in the year-ago period |
|
Stratasys |
$0.01, up from ($0.05) in the year-ago period |
Data source: Company earnings reports.
Advantage: 3D Systems
3D Systems wins this category because it had the higher adjusted profit relative to revenue.
Companies have a varying number of shares, so it's best to consider adjusted net income here. 3D Systems' adjusted net income was $10 million, or 6.4% of its revenue. Stratasys' adjusted net income was $0.5 million, or 0.3% of its revenue.
Adjusted gross margin
|
Company |
Q3 2021 Result |
|---|---|
|
3D Systems |
41.5%, down from 43.2% in the year-ago period |
|
Stratasys |
48.2%, up from 46.8% in the year-ago period |
Data source: Company earnings reports.
Advantage: Stratasys
Stratasys easily takes the gold medal here. 3D Systems' year-over-year decline in adjusted gross margin was primarily driven by its divestiture of noncore assets. However, absent this factor, Stratasys would still have won.
A higher gross margin relative to a competitor with a very similar business profile can reflect stronger pricing power.
Liquidity -- operating cash flow and cash on hand
|
Company |
Q3 2021 Results |
|---|---|
|
3D Systems |
|
|
Stratasys |
|
Data source: Company earnings reports.
Advantage: 3D Systems
Both companies are in great shape from a balance sheet standpoint, with each having roughly half a billion dollars and no debt. However, 3D Systems gets the win because it generated much more cash running its operations than Stratasys did, relative to its revenue. 3D Systems turned 13.3% of its revenue dollars into cash from operations, compared to Stratasys' 1.9%.
Research and development spending
|
Company |
Q3 2021 Result |
|---|---|
|
3D Systems |
$15.8 million, or 10.1% of revenue |
|
Stratasys |
$22.6 million, or 14.2% of revenue |
Data source: Company earnings reports.
Advantage: Stratasys
Stratasys spent a higher percentage of its revenue on research and development (R&D), as well as a higher absolute dollar amount.
Investing in R&D is critical for companies in technology-related businesses if they want to stay competitive.
The winner is... it's a tie.
Score: 3D Systems -- 2.5 points; Stratasys -- 2.5 points
Keep in mind the two caveats mentioned at the opening of this article: Qualitative factors can be as important as quantitative ones, and we only looked at one quarter's results. Long-term investors shouldn't put too much weight on any single quarter's data. In addition, we also didn't look at stock valuations.
