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5 Quick Takes On Stratasys' New Earnings Data

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In a report published Monday morning, Brean Capital analysts Ananda Baruah and David Ryzhik provided some quick takes on Stratasys, Ltd. (NASDAQ: SSYS)'s fourth quarter earnings. The firm maintains a Hold rating on the stock.

The 3D printer maker preannounced its December quarter EPS and provided guidance for 2015 on February 3.

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Now that the full fourth quarter financial statements are out, the analysts highlight some notable points:

  • Organic revenue growth reached 26 percent, year-over-year. The figure surpassed the preannounced growth, but came short of Brean's estimate of 32 percent.
  • Core professional organic revenue growth (ex-MakerBot) came in "very healthy," at 29 percent. The analysts commented: "While consistent with our expectations heading into the Dec Q, we'd view the 29% Y/Y core professional organic growth as encouraging, as we believe this ultimately remains the key aspect of the SSYS bull-case (and rightfully so) – given the softer MakerBot results and increased Opex assumptions which underpinned the pullback in the stock following the pre-announcement (and guide) on 2/2/15."
  • Cash flow from operating activities came it at $15 million, versus the Street's estimate of $61 million.
  • Gross Margins also came in below the Street's expectations of 57.2 percent, at 56.0 percent.
  • Consequently, Operating Margins of 11.5 percent were softer than the Street's estimate of 12.8 percent.

The report states: "While it is unclear what led to the Gross Margin miss, we believe the softer GMs can be a function of either: 1) lower MakerBot volume resulting in lower fixed cost absorption, and/or 2) softer Materials (SSYS does not report Materials), for context though, peer DDD (Hold) reported softer Materials growth in their Dec Q (~11% growth vs. our estimate of 28% Y/Y growth). We will look to the call at 8:30 am ET to get more details on the softer Gross Margins."

Latest Ratings for SSYS

DateFirmActionFromTo
Nov 2017Loop CapitalMaintainsHold
Oct 2017SusquehannaUpgradesNeutralPositive
Aug 2017Deutsche BankMaintainsHold

View More Analyst Ratings for SSYS
View the Latest Analyst Ratings

Posted-In: Ananda Baruah Brean Capital David RyzhikAnalyst Color Earnings News Reiteration Analyst Ratings

 

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