Stratasys Ltd.SSYS is scheduled to report first-quarter 2018 results on May 2. In the trailing four quarters, the company topped earnings estimates thrice, delivering an average beat of approximately 66.97%.
Let's take a look at how things are shaping up prior to this announcement.
Factors to Consider
Improving customer relationships and deeper market penetration are aiding the financials of Stratasys. Product launches and strategic partnerships are helping the company gain a strong foothold in the 3D printing market, which is expected to grow at a CAGR of 25.76% from 2017 to 2023 and reach $32.78 billion.
During the soon-to-be reported quarter, the company partnered with Dassault Systèmes and Industry Visionary Easton LaChappelle for the development of 3D printing based prosthetics. The company also entered into a collaboration with PostNord Strålfors, a subsidiary to PostNord, communication and logistics solutions provider.
In January, Latécoère, a French aerospace manufacturer, deployed Stratasys FDM additive manufacturing for accelerating development of the design and production process. Stratasys also notified that Visual First, a Dutch 3D service bureau, replaced metal machine parts for its client, The Chocolate Factory, with 3D printing material from Stratasys.
However, we remain concerned about its declining gross margin, which has been impacted by incremental sales of lower-margin products of acquired businesses including MakerBot, Solid Concepts and Harvest Technologies. Additionally, the company will continue investing in marketing and R&D to generate higher sales, which will weigh on its operating margins.
Stratasys, Ltd. Price and EPS Surprise
What the Zacks Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or #3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP . The Sell-rated stocks (Zacks Rank #4 or #5) are best avoided.
Stratasys has a Zacks Rank #3 and an Earnings ESP of +4.35%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter ..
The Zacks Consensus Estimate for the fourth quarter is pegged at 8 cents per share, indicating 60% surge on a year-over-year basis. Revenues are estimated to be around $167.29 million, indicating 2.5% increase from the year-ago quarter.
Other Stocks to Consider
Here are some companies that you may also want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Seagate Technology PLC STX has an Earnings ESP of +3.43% and a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here.
Arrow Electronics, Inc. ARW has an Earnings ESP of +0.66% and a Zacks Rank #2.
FireEye, Inc. FEYE has an Earnings ESP of +6.67% and a Zacks Rank #3.
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