Stratasys (SSYS, Financial) stock fell 13.6% today, trading at $6.6353, following the release of mixed earnings results that disappointed investors.
Wall Street analysts had predicted a loss of $0.05 per share for the 3D printing company in the second quarter. Stratasys (SSYS, Financial) reported a narrower loss of $0.04 per share. However, the company missed the revenue forecast of $146.3 million, posting only $138 million in Q2 sales. This $138 million figure represents a 14% decline year-over-year. While consumables sales grew by 6%, the sales of 3D printers dropped significantly due to the current macroeconomic environment.
The reported $0.04-per-share loss was non-GAAP, with GAAP earnings revealing a more substantial loss of $0.36 per share. This was an improvement from the $0.56 per share loss in Q2 2022 but still significantly worse than the non-GAAP figure. In an attempt to address these challenges, Stratasys has initiated focused restructuring actions, including a strategic review and plans to lay off 15% of its workforce, aiming to cut operating costs by about $40 million by early 2025.
Due to restructuring costs, Stratasys (SSYS, Financial) has warned that losses could increase to $1.50 per share in Q3, with a projected loss of $2.23 per share for the first three quarters of the year, which is significantly worse than the original forecasted annual loss of $1.21 per share.
From an investment perspective, Stratasys (SSYS, Financial) holds a market capitalization of $467.39 million, with a price-to-book ratio of 0.54. The stock reflects severe warning signs, including poor financial strength indicated by an Altman Z-Score of -0.75, highlighting the bankruptcy risk within the next two years. The company's Piotroski F-Score of 1 further indicates poor business operations.
On the valuation front, Stratasys (SSYS, Financial) stock price is close to a 10-year low, with a GF Value of $15.28, which can be checked in detail through this GF Value link. Despite the significant decline in revenue per share over the past five years, the PB and PS Ratios also show values close to the 10-year lows, signaling potential undervaluation. However, with continued losses and restructuring costs, caution is warranted for potential investors.
Stratasys (SSYS, Financial) is facing a challenging period ahead, and while the stock might seem undervalued, the company's ongoing financial strain and operational difficulties suggest a cautious approach for investors.
