Stratasys (NASDAQ: SSYS) hasn't yet announced a date for the release of its fourth-quarter and full-year 2019 results, but investors can probably expect them to come out by early March.
This will be the first quarterly release since the 3D printing company named a new CEO. In December the company announced that effective Feb. 18, Yoav Zeif will take the reins from interim CEO Elan Jaglom, who is also chair of the company's board.
Investors will probably be approaching the release with caution. After last quarter's release, the market sent shares tumbling more than 11% because the company's revenue had missed Wall Street's consensus estimate and because management had lowered full-year 2019 revenue guidance.
Stratasys stock has started 2020 off on a solid note, as it's up 7.1% through Jan. 22, compared with the S&P 500's 2.9% return.
Image source: Getty Images.
Key quarterly numbers
Here are Stratasys' year-ago results and Wall Street's estimates as benchmarks.
|Metric||Q4 2018 Result||Wall Street's Q4 2019 Consensus Estimate||Wall Street's Projected Change|
$177. 1 million
Adjusted earnings per share (EPS)
Data sources: Stratasys and Yahoo! Finance.
Investors will want to particularly focus on revenue, as Stratasys needs to grow revenue in order to power earnings growth, at least over the long term.
In the third quarter, the company's revenue edged down 2.8% year over year to $157.5 million, which management attributed to a continuation of the challenging macroeconomic climate in Europe and Asia. Loss per share under generally accepted accounting principles (GAAP) widened to $0.13 from $0.01 in the year-ago period, while adjusted EPS rose 9.1% to $0.12.
Sales of 3D printers
All eyes should be on the all-important 3D printer revenue. This metric is crucial because sales of 3D printers drive recurring sales of print materials, which sport high profit margins.
In the third quarter, 3D printer revenue fell 9% year over year. This result was slightly better than the 10% decline in the second quarter.
It's important to keep an eye on Stratasys' gross margin because this metric usually reflects pricing power. In the third quarter, the company's GAAP gross margin was 49.2%, up from 48.7% in the year-ago period but lower than the 49.7% of the second quarter. Adjusted gross margin landed at 52.4%, up from 52.1% in the year-ago period but a bit lower than the previous quarter's 52.5%.
For context, in the third quarter, 3D Systems' (NYSE: DDD) GAAP and adjusted gross margins were 43.3% and 44.4%, respectively. So Stratasys is performing considerably better than its prime 3D printing competitor on this metric.
Operating cash flow
In recent quarters, Stratasys has been using cash in its operations, a reversal of its usual dynamic of generating cash. Obviously, investors would like to see this change.
In the third and second quarters, the company used cash of $8.6 million and $3.8 million, respectively, in its operations. Nonetheless, its cash position remains robust, as it had $347.1 million in cash at the end of last quarter. That cash pile is a lot bigger than that of 3D Systems, which ended last quarter with $127.6 million.
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