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While the sector has returned 19.4% over the time frame, the industry has dropped 27.4%. SSYS has lagged its industry peers like Mercury Systems (MRCY - Free Report) , Immersion (IMMR - Free Report) and TransAct Technologies (TACT - Free Report) .
Over the same timeframe, TACT shares have decreased 38%, whereas shares of IMMR and MRCY have gained 25.6% and 0.7%, respectively.
Stratasys’ results have been suffering from high interest rates, macroeconomic uncertainties and reduced capital equipment spending.
Stratasys’s total revenues, as reported for the first half of 2024, declined 8.8% year over year to $282 million. In the same timeframe, SSYS’ product revenues were $192 million, and service revenues were $89 million, down 8.2% and 9.8%, respectively.
SSYS expects the issues to continue to negatively impact its second-half 2024 results due to delayed purchases and a longer sales cycle.
However, it expects consumables demand to remain steady over the foreseeable future despite recent weakness in hardware sales, which is expected to grow in the second half due to improved product pipeline, higher government sales and continued strength in dental.
The Zacks Consensus Estimate for both the third quarter of 2024 and the full year of 2024 earnings has shown a declining trend over the past 30 days.
The Zacks Consensus Estimate for third quarter 2024 earnings is currently pegged at 2 cents, down 71.4% over the past 30 days.
The consensus mark for earnings is pegged at 5 cents per share, down 64.3% over the past 30 days.
The consensus mark for third-quarter 2024 revenues is pegged at $152.6 million, indicating a year-over-year decline of 5.9%.
For 2024, the Zacks Consensus Estimate for revenues is pegged at $570 million, indicating a year-over-year decline of 9.18%.
Will 3D Printing Technology Aid SSYS’ Prospects?
Stratasys has introduced newer technology in 3D printing and has also partnered with AM Craft in an effort to maximize the benefit of additive manufacturing.
The user base of 3D solutions is increasing and is promising a long-term investment potential.
The global 3D printing market is estimated to be $17.5 billion in 2024 and is expected to increase to $37.4 billion by 2029, increasing by 16.4% during the period.
SSYS recently enrolled a patient in a clinical study to analyze the efficacy of 3D-printed models for orthopaedic oncology, making it one of its major milestones.
Will Restructuring be Successful in Rescuing SSYS Stock?
Stratasys has confirmed the implementation of two new strategies to increase value to shareholders.
First, it will aim to modify the cost composition to efficiently nullify the effects of macroeconomic volatility, primarily by reducing its workforce by 15%.
Second, SSYS expects to increase market share by utilizing its existing technology and innovation capabilities to drive an EBITDA margin of 8% at current revenue levels, starting the first quarter 2025.
In spite of the restructuring efforts, SSYS faces the purchase constraints of its current customers. Reduced capital spending are impacting Stratasys' revenues negatively.
Conclusion
SSYS stock is not so cheap as the Value Score of D suggests a stretched valuation at this moment.
Stratasys currently has a Zacks Rank #4 (Sell), which implies that investors should stay away from the stock for the time being.
Stratasys (SSYS - Free Report) shares have plunged 47.7% year to date underperforming the broader Zacks Computer and Technology Sector and the Zacks Computer-Peripheral Equipment Industry.
While the sector has returned 19.4% over the time frame, the industry has dropped 27.4%. SSYS has lagged its industry peers like Mercury Systems (MRCY - Free Report) , Immersion (IMMR - Free Report) and TransAct Technologies (TACT - Free Report) .
Over the same timeframe, TACT shares have decreased 38%, whereas shares of IMMR and MRCY have gained 25.6% and 0.7%, respectively.
Stratasys’ results have been suffering from high interest rates, macroeconomic uncertainties and reduced capital equipment spending.
Stratasys’s total revenues, as reported for the first half of 2024, declined 8.8% year over year to $282 million. In the same timeframe, SSYS’ product revenues were $192 million, and service revenues were $89 million, down 8.2% and 9.8%, respectively.
Stratasys, Ltd. Price and Consensus
Stratasys, Ltd. price-consensus-chart | Stratasys, Ltd. Quote
Outlook Not so Rosy for SSYS’ Prospects
SSYS expects the issues to continue to negatively impact its second-half 2024 results due to delayed purchases and a longer sales cycle.
However, it expects consumables demand to remain steady over the foreseeable future despite recent weakness in hardware sales, which is expected to grow in the second half due to improved product pipeline, higher government sales and continued strength in dental.
The Zacks Consensus Estimate for both the third quarter of 2024 and the full year of 2024 earnings has shown a declining trend over the past 30 days.
The Zacks Consensus Estimate for third quarter 2024 earnings is currently pegged at 2 cents, down 71.4% over the past 30 days.
The consensus mark for earnings is pegged at 5 cents per share, down 64.3% over the past 30 days.
The consensus mark for third-quarter 2024 revenues is pegged at $152.6 million, indicating a year-over-year decline of 5.9%.
For 2024, the Zacks Consensus Estimate for revenues is pegged at $570 million, indicating a year-over-year decline of 9.18%.
Will 3D Printing Technology Aid SSYS’ Prospects?
Stratasys has introduced newer technology in 3D printing and has also partnered with AM Craft in an effort to maximize the benefit of additive manufacturing.
The user base of 3D solutions is increasing and is promising a long-term investment potential.
The global 3D printing market is estimated to be $17.5 billion in 2024 and is expected to increase to $37.4 billion by 2029, increasing by 16.4% during the period.
SSYS recently enrolled a patient in a clinical study to analyze the efficacy of 3D-printed models for orthopaedic oncology, making it one of its major milestones.
Will Restructuring be Successful in Rescuing SSYS Stock?
Stratasys has confirmed the implementation of two new strategies to increase value to shareholders.
First, it will aim to modify the cost composition to efficiently nullify the effects of macroeconomic volatility, primarily by reducing its workforce by 15%.
Second, SSYS expects to increase market share by utilizing its existing technology and innovation capabilities to drive an EBITDA margin of 8% at current revenue levels, starting the first quarter 2025.
In spite of the restructuring efforts, SSYS faces the purchase constraints of its current customers. Reduced capital spending are impacting Stratasys' revenues negatively.
Conclusion
SSYS stock is not so cheap as the Value Score of D suggests a stretched valuation at this moment.
Stratasys currently has a Zacks Rank #4 (Sell), which implies that investors should stay away from the stock for the time being.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.