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Stratasys Earnings: Will Cathie Wood's Stock Dump Timing Prove Smart?

By Beth McKenna – Jul 14, 2022 at 11:07AM

Key Points

  • Wall Street expects the 3D printer company's second-quarter revenue to be up by 13% year over year.
  • Analysts also project the company's adjusted loss per share will narrow by 50%.
  • Management's guidance should be even more important than usual because of the challenging macroeconomic environment.

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When the company's Q2 report arrives, investors should focus on its sales of 3D printers and print materials.

Stratasys (SSYS -1.21%) is slated to report its second-quarter results before the market opens on Aug. 3. At this point, it appears that the 3D printing company's report will precede that of rival 3D Systems, which hasn't yet announced a date for its next earnings release. 

Investors will probably be approaching Stratasys' upcoming report with somewhat equal doses of optimism and caution. On the positive side, the company has made good progress in improving its results following the earlier stages of the pandemic, which significantly hurt its sales to the industrial sector. Moreover, last quarter, it easily beat analysts' consensus estimates for both revenue and earnings. That pleased investors enough to send its shares up by 11.6%.

However, warning signs that the U.S. economy could slide into a recession this year or next year have been intensifying. So investors are probably concerned about the effects the challenging macroeconomic environment could have on Stratasys' results over the short and medium terms. That's why the company's guidance should be even more important than usual this time.

Additionally, some investors are probably concerned that Ark Invest CEO Cathie Wood dumped Stratasys stock from her exchange-traded funds (ETFs) in a major way in early July. Granted, Wood's hand has been ice-cold lately, but she whipped other fund managers during the earlier stages of the pandemic and remains worth following.

On July 5, Wood's Ark Innovation ETF sold 1.8 million shares of Stratasys. As of July 14, it holds fewer than 124,000 shares of Stratasys, which account for only about 0.02% of the fund's value. Not surprisingly, Stratasys stock plunged on July 6 after Ark's huge sale was revealed, losing 14.8% of its value.

With this background in mind, here's what investors should be watching for in Stratasys' Q2 report.

Close-up of a large, industrial 3D printer producing a red plastic object.

Image source: Getty Images.

Stratasys' key numbers 

Below are Wall Street's consensus estimates for the recently completed quarter and the company's results from the prior-year period. 

Metric  Q2 2021 Result Analysts' Q2 2022 Consensus Estimate Projected Change
Revenue $147.0 million $166.3 million 13%
Adjusted earnings per share (EPS) ($0.02) ($0.01) Loss projected to narrow by 50%

Data sources: Stratasys and Yahoo! Finance.

For Q2, Stratasys guided for year-over-year revenue growth by a percentage in the low-to-mid teens. Management did not provide guidance regarding the quarter's earnings.

For context, in the first quarter, Stratasys' revenue increased 22% year over year to $163.4 million, surpassing the $157.6 million Wall Street had expected and beating the company's guidance for a growth percentage in the high teens. That growth was driven by the company's products segment, where sales jumped 25%; its services segment's sales rose by just 15%. Within the products business, 3D printer revenue surged by 37% and print materials revenue grew by 16%. It was the company's best first quarter in terms of 3D printer sales in six years. This bodes well for its future sales of print materials because sales of machines drive sales of materials, which sport high margins. 

Last quarter's adjusted net income was $1.2 million, or $0.02 per share, up from an adjusted net loss of $0.06 per share in the year-ago period. This result well outperformed the adjusted loss of $0.04 per share that analysts had projected.

Guidance

Any notable change in the company's 2022 guidance will probably move the stock.

For the year, Stratasys' current outlook is for revenue in the range of $685 million to $695 million, which would equate to growth of about 13% to 15%. Management also expects adjusted earnings per share in the range of $0.14 to $0.19. In 2021, the company had an adjusted loss per share of $0.07.

Beth McKenna has no position in any of the stocks mentioned. The Motley Fool recommends 3D Systems. The Motley Fool has a disclosure policy.

Stocks Mentioned

Stratasys Stock Quote
Stratasys
SSYS
$13.84 (-1.21%) $0.17

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