Small Cap Stratasy Q4 Earnings Report: Better?

The full Q4 2016 earnings report for small cap 3D printing stockStratasys, Ltd (NASDAQ: SSYS)is scheduled for before the market opens onThursday (March 9th). Its hard to see 3D printing stocks regaining their former highs any time soon as HP Inc (NYSE: HPQ) has entered the3D printer market with its Jet Fusion 3D. However,it appears that 3D printing stockshave stabilized as the short interest has largely been cleared out.

A technical chart for small cap Stratasys, Ltd shows volatility with a late December bottom:

A long term performance chart shows shares of Stratasys, Ltd along with other small cap 3D printing stocks like 3D Systems Corporation (NYSE: DDD), ExOne Co (NASDAQ: XONE)and Voxeljet AG (NYSE: VJET) all peaking a few years and all showing some signs of stabilization over the past year:

Back in mid November, Stratasys, Ltd reportedthat Q3 revenue was $157.2 million versus $167.6 million and the GAAP net loss was $20.8 million versus aloss of $901.3 million. The Company maintains $239.3 million in cash and cash equivalents as of the end of the third quarter.

The CEO stated:

“The introductions of the Stratasys Infinite-Build and Robotic Composite 3D Demonstrators both evidence the unique long-term value of our core technologies and highlight the importance of strategic relationships in developing solutions that target specific, high-value added applications. These innovations demonstrate our potential to meet the needs of customers by leveraging our core assets within key vertical markets. We believe these types of opportunities remain significant across multiple industries, and we are committed to seeking their further development.”

“We were pleased to recognize additional improvements to our operational efficiency during the period which was reflected in a reduction in non-GAAP operating expenses and increase in our non-GAAP gross margin compared to the same period last year. We will continue to seek further improvements in our cost structure as we strive to align our operations even more closely with our anticipated results.”

For fiscal year ending December 31, 2016 guidance, the earnings report noted:

Revenue guidance of $662 to $673 million. GAAP net loss of $76 to $71 million, or ($1.44) to ($1.35) per diluted share. Non-GAAP net income of $7 to $11 million, or $0.13 to $0.21 per diluted share.

And for prospective performance and strategic plans for fiscal 2016:

Non-GAAP gross margin in a range of 54% to 55%. Non-GAAP operating margin of 3% to 4%. Non-GAAP Tax expense of $15 to $17 million, which includes the negative impact of the planned accounting treatment for tax valuation allowance. Capital expenditures are projected at $50 to $60 million.

Given the expected ongoing negative impact of not recording a tax benefit on U.S. tax losses on the Company non-GAAP net income, the Company believes that the rate of growth in its non-GAAP operating income will be the best measure of performance.

Finally, here is a quick recap of Stratasys, Ltds recent earnings history along with EPS estimate trends from the Yahoo! Finance analyst estimates page:

EPS Est. -0.12 -0.04 0.06 0.05
EPS Actual -0.01 0.01 0.12 N/A
Difference 0.11 0.05 0.06 -0.05
Surprise % 91.70% 125.00% 100.00% -100.00%
EPS TrendCurrent Qtr. (Dec 2016)Next Qtr. (Mar 2017)Current YearNext Year
Current Estimate 0.05 0.08 0.18 0.49
7 Days Ago 0.05 0.08 0.18 0.48
30 Days Ago 0.05 0.08 0.18 0.48
60 Days Ago 0.05 0.08 0.18 0.47
90 Days Ago 0.05 0.08 0.18 0.47

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