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Stratasys (SSYS) Gains 5% on Stellar Q4 Earnings Surprise
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Shares of Stratasys Ltd. (SSYS - Free Report) appreciated 5.1% on Monday after the 3D printer hardware and software solution provider posted stellar fourth-quarter 2020 earnings results.
The company reported non-GAAP earnings of 13 cents per share in the fourth quarter. The Zacks Consensus Estimate was pegged at a loss of a penny. However, the company’s bottom-line figure declined 27.8% from the year-ago quarter’s earnings of 18 cents per share mainly due to lower revenues.
Stratasys’ revenues of $142.4 million slid 11.1% year over year. The revenue figure, however, surpassed the consensus mark of $135.4 million. This year-over-year decline in the top line reflects the adverse impact of the COVID-19 pandemic which has dampened the demand for its products and services.
Nonetheless, the company registered strong sequential growth across all metrics, including revenues, earnings, gross and operating margins, and cash flows. This shows that Stratasys is rapidly recovering from the pandemic-induced chaos, which is, in turn, boosting investors’ confidence in the stock.
Stratsys CEO Dr. YoavZeif said that "We delivered sequential revenue growth in the back half of the year and this quarter produced the highest operating cash flow in almost three years. We believe both our industry and company are starting to enter a meaningful, sustained trajectory of unprecedented growth and are excited to capitalize on the opportunities ahead."
Q4 Details
Segment wise, Product revenues were down 9% from the year-ago quarter to $99.2 million. Within Product revenues, System revenues decreased 8.3% and Consumables revenues fell 9.6% year over year.
Revenues from Services slid 15.6% year on year to $43.2 million. Within Service revenues, customer support revenues dropped 3.7% year over year.
Stratasys’ non-GAAP gross profit dipped 16% from the year-ago quarter to $70.5 million. Non-GAAP gross margin contracted 290 basis points (bps) to 49.5% mainly due to higher amount of systems and consumables in the sales mix.
Non-GAAP operating expenses flared up 15.7% year on year to $62.2 million. Nevertheless, as a percentage of revenues, it shrunk 240 bps to 43.7% primarily on the proactive resizing measures taken by management in the second quarter of 2020. The company’s cost-containment efforts, including adopting a four-day work week, also helped minimize expenses.
Non-GAAP operating income totaled $8.3 million compared with the operating income of $10.2 million recorded in the prior-year quarter.
The company exited the fourth quarter with cash and short-term deposits of $299 million compared with the $308 million witnessed at the end of the previous quarter.
As of Dec 31, 2020, there was no long-term debt.
During the October-December quarter, the company generated operating cash flow of $23.7 million.
Business Outlook
Based on the current business and macroeconomic environment and anticipated recovery, the company provided some insights about its future quarterly results.
Stratasys anticipates its first-quarter 2021 revenues to track relatively similar to the year-ago quarter.
For the second quarter, management projects revenues to grow in the mid-teen percentage range on a year-over-year basis.
Furthermore, Stratasys estimates full-year 2021 operating expenses to be up $25 million from the 2020 level chiefly due to its return to the five-day work week from the four-day strategy as well as the impact of recent acquisitions.
Zacks Rank & Other Key Picks
Stratasys currently carries a Zacks Rank #2 (Buy).
The long-term earnings growth rate for Zoom, Apple and Facebook is currently pegged at 25%,11.5% and 19.2%, respectively.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Stratasys (SSYS) Gains 5% on Stellar Q4 Earnings Surprise
Shares of Stratasys Ltd. (SSYS - Free Report) appreciated 5.1% on Monday after the 3D printer hardware and software solution provider posted stellar fourth-quarter 2020 earnings results.
The company reported non-GAAP earnings of 13 cents per share in the fourth quarter. The Zacks Consensus Estimate was pegged at a loss of a penny. However, the company’s bottom-line figure declined 27.8% from the year-ago quarter’s earnings of 18 cents per share mainly due to lower revenues.
Stratasys’ revenues of $142.4 million slid 11.1% year over year. The revenue figure, however, surpassed the consensus mark of $135.4 million. This year-over-year decline in the top line reflects the adverse impact of the COVID-19 pandemic which has dampened the demand for its products and services.
Stratasys, Ltd. Price, Consensus and EPS Surprise
Stratasys, Ltd. price-consensus-eps-surprise-chart | Stratasys, Ltd. Quote
Nonetheless, the company registered strong sequential growth across all metrics, including revenues, earnings, gross and operating margins, and cash flows. This shows that Stratasys is rapidly recovering from the pandemic-induced chaos, which is, in turn, boosting investors’ confidence in the stock.
Stratsys CEO Dr. YoavZeif said that "We delivered sequential revenue growth in the back half of the year and this quarter produced the highest operating cash flow in almost three years. We believe both our industry and company are starting to enter a meaningful, sustained trajectory of unprecedented growth and are excited to capitalize on the opportunities ahead."
Q4 Details
Segment wise, Product revenues were down 9% from the year-ago quarter to $99.2 million. Within Product revenues, System revenues decreased 8.3% and Consumables revenues fell 9.6% year over year.
Revenues from Services slid 15.6% year on year to $43.2 million. Within Service revenues, customer support revenues dropped 3.7% year over year.
Stratasys’ non-GAAP gross profit dipped 16% from the year-ago quarter to $70.5 million. Non-GAAP gross margin contracted 290 basis points (bps) to 49.5% mainly due to higher amount of systems and consumables in the sales mix.
Non-GAAP operating expenses flared up 15.7% year on year to $62.2 million. Nevertheless, as a percentage of revenues, it shrunk 240 bps to 43.7% primarily on the proactive resizing measures taken by management in the second quarter of 2020. The company’s cost-containment efforts, including adopting a four-day work week, also helped minimize expenses.
Non-GAAP operating income totaled $8.3 million compared with the operating income of $10.2 million recorded in the prior-year quarter.
The company exited the fourth quarter with cash and short-term deposits of $299 million compared with the $308 million witnessed at the end of the previous quarter.
As of Dec 31, 2020, there was no long-term debt.
During the October-December quarter, the company generated operating cash flow of $23.7 million.
Business Outlook
Based on the current business and macroeconomic environment and anticipated recovery, the company provided some insights about its future quarterly results.
Stratasys anticipates its first-quarter 2021 revenues to track relatively similar to the year-ago quarter.
For the second quarter, management projects revenues to grow in the mid-teen percentage range on a year-over-year basis.
Furthermore, Stratasys estimates full-year 2021 operating expenses to be up $25 million from the 2020 level chiefly due to its return to the five-day work week from the four-day strategy as well as the impact of recent acquisitions.
Zacks Rank & Other Key Picks
Stratasys currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks in the broader technology sector include Zoom Video Communications (ZM - Free Report) , Apple (AAPL - Free Report) and Facebook , all carrying a Zacks Rank #2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Zoom, Apple and Facebook is currently pegged at 25%,11.5% and 19.2%, respectively.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>