Yahoo Finance Stratasys (SSYS) to Report Q1 Earnings: What's in the Offing?
Stratasys SSYS is slated to release first-quarter 2023 results on May 16.
Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 158.3%.
The Zacks Consensus Estimate for Stratasys’ first-quarter revenues is pegged at $142.2 million, indicating a year-over-year decrease of 13%. The consensus mark for the bottom line stands at a loss of 8 cents per share. Stratasys had posted non-GAAP earnings of 2 cents per share in the year-ago quarter.
Let’s see how things have shaped up before the upcoming announcement.
Stratasys, Ltd. Price and EPS Surprise
Stratasys, Ltd. price-eps-surprise | Stratasys, Ltd. Quote
Factors to Consider
The year-over-year expected decline in top and bottom lines is primarily due to the loss of revenues and earnings resulting from the divestment of its previously wholly-owned subsidiary, MakerBot. Notably, Stratasys completed the merger of MakerBot with NPM Capital-backed Ultimaker in September 2022.
The newly formed company is operating under the Ultimaker name, and Stratasys holds a minority stake of 46.5% in it, while NPM Capital owns the remaining 53.5%. Given its minority ownership in the combined company, SSYS had stated that financial contributions from MakerBot would not be included in its consolidated financial statements from Sep 1, 2022, onward.
Nonetheless, Stratasys’ first-quarter performance is likely to have benefited from the strong demand for its remaining products and solutions. Accelerated digital modernization across several industries in a continued response to economic changes post-COVID-19 is likely to have been an upside.
With many engineers, designers, architects and entrepreneurs resorting to 3D solutions for their primary designing and product modeling, the 3D printing market is becoming a favorable long-term investment opportunity. This trend is likely to have spurred the demand for Stratasys’ 3D products and solutions in the first quarter.
An improvement in product quality and performance, along with multiple product launches, is expected to have boosted the firm’s performance.
Over the past 12 months, SSYS launched several products and solutions, including GrabCAD Print for the Stratasys Origin One and Origin One Dental 3D printers and TrueDent – a monolithic, full-color 3D printed permanent dentures solution. These product launches with enhanced capabilities are likely to have helped the company gain new customers in the to-be-reported quarter.
However, the weakening global economy amid ongoing macroeconomic and geopolitical issues led enterprises to postpone their large IT spending plans. This might have hurt Stratasys’ top line in the first quarter. Additionally, inflation and increased component costs are likely to have weighed on Stratasys’ profitability in the quarter.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for SSYS this season. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
Though Stratasys currently carries a Zacks Rank of 2, it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, Agilent A, Cisco Systems CSCO and HP Inc. HPQ have the right combination of elements to post an earnings beat in their upcoming releases.
Agilent carries a Zacks Rank #2 and has an Earnings ESP of +0.40%. The company is scheduled to report second-quarter fiscal 2023 results on May 23. Its earnings beat the Zacks Consensus Estimate in the preceding four quarters, with the average surprise being 7%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Agilent’s second-quarter earnings stands at $1.27 per share, implying a year-over-year increase of 12.4%. It is estimated to report revenues of $1.67 billion, which suggests an increase of approximately 3.8% from the year-ago quarter.
Cisco carries a Zacks Rank #3 and has an Earnings ESP of +1.59%. The company is slated to report third-quarter fiscal 2023 results on May 17. Its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 1.8%.
The Zacks Consensus Estimate for CSCO’s third-quarter earnings is pegged at 97 cents per share, indicating a year-over-year increase of 11.5%. The consensus mark for revenues stands at $14.39 billion, suggesting a year-over-year increase of 12.1%.
HP is set to report second-quarter fiscal 2023 results on May 30. The company has a Zacks Rank #3 and an Earnings ESP of +2.24% at present. HP’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 1.1%.
The Zacks Consensus Estimate for HPQ’s second-quarter earnings is pegged at 76 cents per share, suggesting a decline of 29.6% from the year-ago quarter’s earnings of $1.11. HP’s quarterly revenues are estimated to decrease 19.9% year over year to $13.21 billion.
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