Stratasys (SSYS 8.24%) and 3D Systems (DDD 8.61%) recently released their first-quarter 2022 reports. So, investors can now compare the two 3D printing companies' results, metric by metric.
Investors should keep in mind that qualitative factors can be just as important as quantitative ones, and this comparison looks at just a single quarter's results. Nonetheless, the data in this article should help you make better investing decisions in the 3D printing space.
Image source: Getty Images.
Revenue
| Company | Q1 2022 Result |
|---|---|
| 3D Systems | $133.0 million, down 9% from the year-ago period (and up 10%, excluding the impact of divestitures) |
| Stratasys | $163.4 million, up 22% from the year-ago period |
Data sources: Company earnings reports.
Advantage: Stratasys.
Stratasys takes the gold metal here. In Q1, its year-over-year revenue growth was a robust 22%, which beat the 17% growth Wall Street had expected. Its revenue from sales of 3D printers grew an even stronger 37% year over year. This is a "particularly encouraging sign because 3D printer sales drive sales of print materials, which have higher profit margins," as I wrote in my earnings article.
3D Systems' revenue declined year over year but only because the company divested noncore assets last year. Excluding divestitures, its revenue grew 10%, reflecting a so-so performance.
One reason for Stratasys' revenue outperformance, however, is that it had an easier year-ago comparable. In Q1 2021, Stratasys' revenue edged up just 1% year over year. 3D Systems' revenue for the same quarter increased nearly 8% year over year, and grew 17% excluding the impact of divestitures.
GAAP earnings per share (EPS)
| Company | Q1 2022 Result |
|---|---|
| 3D Systems | ($0.21), down from $0.36 in the year-ago period |
| Stratasys | ($0.32), flat with ($0.32) in the year-ago period |
Data sources: Company earnings reports. GAAP = generally accepted accounting principles.
Advantage: N/A.
This category is included just for information purposes and isn't included in the scoring. GAAP results don't exclude one-time items, so they're often not comparable. 3D Systems' result in the year-ago period, for instance, got a boost from the company's sale of some noncore assets.
Neither company is profitable from a GAAP standpoint and that's certainly something investors would like to see, at least during most quarters.
Adjusted EPS
| Company | Q1 2022 Result |
|---|---|
| 3D Systems | ($0.06), down from $0.17 in the year-ago period |
| Stratasys | $0.02, up from ($0.06) in the year-ago period |
Data sources: Company earnings reports.
Advantage: Stratasys.
Stratasys is the victor here. Adjusted for one-time items, it posted a profit, whereas 3D Systems turned in a loss. Moreover, Stratasys' result improved from the year-ago period, whereas 3D Systems' result worsened.
Adjusted gross margin
| Company | Q1 2022 Result |
|---|---|
| 3D Systems | 40.6%, down from 44% in the year-ago period |
| Stratasys | 47.3%, up from 46.7% in the year-ago period |
Data sources: Company earnings reports.
Advantage: Stratasys.
Stratasys handily wins this category. 3D Systems' year-over-year decline in adjusted gross margin was due to "product mix changes primarily as a result of divestitures and supply chain pressures," the company said in its earnings release.
A higher gross margin relative to a competitor with a very similar business profile can reflect stronger pricing power.
Liquidity -- operating cash flow and net cash position
| Company | Q1 2022 Result |
|---|---|
| 3D Systems |
|
| Stratasys |
|
Data sources: Company earnings reports.
Advantage: Stratasys.
Both companies used cash running their operations during the quarter, so neither performed well with respect to operating cash flow. On an absolute basis, Stratasys' operating cash outflow was a little higher than that of 3D Systems. But when we consider revenue along with this metric, Stratasys performed a bit better because it used less cash to generate every dollar of revenue than did 3D Systems. However, these ratios are close enough to call this part of this category a draw.
Stratasys wins the second part of this category, as its net cash position of $475.6 million is notably higher than its rival's $298.1 million.
Research and development spending
| Company | Q1 2022 Result |
|---|---|
| 3D Systems | $21.6 million, or 16.2% of revenue |
| Stratasys | $24.0 million, or 14.7% of revenue |
Data sources: Company earnings reports.
Advantage: 3D Systems.
3D Systems spent a higher percentage of its revenue on research and development (R&D) than did Stratasys. However, the disparity is relatively small.
Investing in R&D is particularly crucial for technology-related companies.
The winner is... Stratasys.
Score: Stratasys -- 4 points; 3D Systems -- 1 point
Stratasys easily wins this Q1 2022 metric-to-metric face-off. That said, keep in mind the previously stated caveats: qualitative factors can be just as important as quantitative ones, and this analysis examined just one quarter's results.
