What's happening: Shares of Stratasys (NASDAQ:SSYS) traded up almost 10.7% during today's market session on relatively normal volume, and closed up 9.65%. There wasn't any apparent news driving the action.
Why it's happening: Since competitor 3D Systems reported its second-quarter earnings last Thursday, which didn't offer any major surprises, the 3D printing sector in general has moved higher. It's worth noting that the two companies are among the most widely shorted stocks on the market, with 32.5% and 24.9% of their respective shares outstanding being sold short. It's possible that the bears have been simply reassessing the landscape since 3D Systems' earnings.
On July 30, Stratasys reported that its second-quarter revenue grew by an anemic 2% year over year to $182.3 million, translating to a net loss of $0.55 per share, or an adjusted net profit of $0.15 per share. Although Stratasys' headline results fell in line with analyst expectations, the company withdrew its full-year guidance, and instead provided third-quarter guidance that fell well below what the Street was expecting.
For the third quarter, Stratasys now expects to bring in between $175 million and $190 million in revenue, and to earn $0.03 and $0.13 per share on an adjusted basis. Prior to the revision, Wall Street was hoping Stratasys would generate third-quarter sales of $216.5 million and earn an adjusted $0.47 per share.
Ultimately, when a stock makes a big move for no apparent reason, it's important to focus on the fundamental drivers of the underlying business, rather than how the stock is behaving in the short term.