Key Factors to Note Ahead of Stratasys' (SSYS) Q2 Earnings
Stratasys SSYS is slated to release second-quarter 2023 results on Aug 9.
The Zacks Consensus Estimate for Stratasys’ second-quarter revenues is pegged at $153.2 million, indicating a year-over-year decrease of 8%. The consensus mark for the bottom line stands at a loss of 3 cents per share. Stratasys posted non-GAAP earnings of 2 cents per share in the year-ago quarter.
Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 152.1%.
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 the top and bottom lines is primarily due to an unfavorable currency exchange rate and the loss of revenues and earnings resulting from the divestment of its previously wholly owned subsidiary, MakerBot. 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’ second-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 second 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 second 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 3, 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, NVIDIA NVDA, Workday WDAY and PagSeguro Digital PAGS have the right combination of elements to post an earnings beat in their upcoming releases.
NVIDIA is slated to report second-quarter fiscal 2024 results on Aug 23. The company sports a Zacks Rank #1 and has an Earnings ESP of +5.56% at present. NVDA’s earnings beat the Zacks Consensus Estimate twice in the trailing four quarters while missing the same on two occasions, the average surprise being 0.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for second-quarter earnings is pegged at $2.06 per share, suggesting a whopping increase of 303.9% from the year-ago quarter’s earnings of 51 cents. NVIDIA’s quarterly revenues are estimated to increase 64.4% year over year to $11.02 billion.
Workday sports a Zacks Rank #1 and has an Earnings ESP of +2.36%. The company is scheduled to report second-quarter fiscal 2024 results on Aug 24. Its earnings beat the Zacks Consensus Estimate in the preceding four quarters, with the average surprise being 13.1%.
The Zacks Consensus Estimate for Workday’s second-quarter earnings stands at $1.24 per share, 49.4% higher than the year-ago quarter. It is estimated to report revenues of $1.77 billion, which suggests an increase of approximately 15.5% from the year-ago quarter.
PagSeguro sports a Zacks Rank #1 and has an Earnings ESP of +2.97%. The company is anticipated to report second-quarter 2023 results on Aug 24. Its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 36.7%.
The Zacks Consensus Estimate for PAGS’ second-quarter earnings is pegged at 25 cents per share, indicating a year-over-year decline of 46.8%. The consensus mark for revenues stands at $689.4 million, suggesting a year-over-year decrease of 13.2%.
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