Oppenheimer On Stratasys: 'And The (Down) Beat Goes On…'

In a report published Tuesday evening, Oppenheimer analyst Holden Lewis commented on

's pre-announcement of "severe" cuts to its first quarter and 2015 forecasts. Stratasys said it expects first quarter sales to be in a range of $171 million to $173 million, short of Lewis' $202 million estimate while the company sees its non-GAAP earnings per share estimate in a range of $0.02 to $0.04 – also short of his $0.30 per share estimate. For the full fiscal year, the company expects sales to be in a range of $800 million to $860 million, short of the analyst's $952.3 million estimate. Finally, the company's non-GAAP earnings per share estimate for the full year of $1.20 to $1.70 is also short of the analyst's $2.15 estimate. As a result of the company's guidance, the analyst slashed his estimates and now expects the company to earn $0.03 in the first quarter and $1.45 for the full fiscal year. He also lowered his 2016 earnings per share estimate to $2.00 from a prior $2.70 and also lowered his 2017 earnings per share estimate to $3.20 from $4.10. "3D Systems Corporation's effort to explain the sharp pullback in unit demand was lacking, and Stratasys doesn't try," Lewis wrote. "It is positive in a way that the issue is industry-and not firm-specific, but as it clashes with the tone at AMUG (Additive Manufacturing Users Group Conference) it is perplexing just the same." Lewis said that Stratasys' slumping growth "baffles" as management has "no easy answer" to the sharp slowing in commercial demand. Moreover, the company is "unapologetic" about its growth spending as it still sees high operating expenses despite slower sales. Bottom line, Lewis did state that "eventually" numbers will be "gutted enough" that investor confidence can be rebuilt, but until that becomes more visible, he will retain a "more cautious" Perform rating (with no assigned price target).