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Stratasys (SSYS) Downsizes Workforce in Cost-Cutting Bid
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Stratasys Ltd. (SSYS - Free Report) is taking strong steps to boost growth while trying to deal with the coronavirus pandemic. It recently announced the move to downsize the workforce in order to reduce operating expenses and return to growth.
The company mentioned that the impacts of the coronavirus pandemic have prompted this step sooner than planned and will affect about 10% of its global workforce.
Stratasys also mentioned that this move will not affect its future product launches.
Notably, the company expects its cost-reduction measures, including the resizing move, to reduce annualized operating expenses by about $30 million.
The company will bear approximately $6 million of severance costs, mostly in the second quarter of this year. Yoav Zeif, CEO of Stratasys, said, “Current conditions make the job market even more challenging, and we have done our best to provide the departing employees globally with a respectable and fair separation.”
Stratasys recently released its first-quarter 2020 results, which reflected the impacts of the pandemic on its business. The company witnessed a year-over-year decline in each of its reportable segments and revenues declined a significant 14.4% year over year.
Moreover, it witnessed an operating loss as well as contracting margins. Also, Stratasys has a high-cost structure and remains in the investment mode. Considering the evolving nature of the 3D printing market and the high cost of operations associated with it, we believe that much of the company’s long-term profitability will depend on efficient cost management.
However, an increase in demand for 3D printed medical equipment is a boon for the company. Moreover, its cost-control initiatives are expected to reflect positively on expenses in the coming quarters.
Notably, its efforts to cut SG&A costs helped reduce operating expenses in the last reported quarter by 1.6%. We believe that its downsizing step along with other efforts will help Stratasys tide over the current challenges and attain profitability.
Zacks Rank & Stocks to Consider
Stratasys currently carries a Zacks Rank #4 (Sell).
Long-term earnings growth rate for Rambus, Semtech and SYNNEX is currently pegged at 15%, 12.50% and 9.37%, respectively.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. 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) Downsizes Workforce in Cost-Cutting Bid
Stratasys Ltd. (SSYS - Free Report) is taking strong steps to boost growth while trying to deal with the coronavirus pandemic. It recently announced the move to downsize the workforce in order to reduce operating expenses and return to growth.
The company mentioned that the impacts of the coronavirus pandemic have prompted this step sooner than planned and will affect about 10% of its global workforce.
Stratasys also mentioned that this move will not affect its future product launches.
Notably, the company expects its cost-reduction measures, including the resizing move, to reduce annualized operating expenses by about $30 million.
The company will bear approximately $6 million of severance costs, mostly in the second quarter of this year. Yoav Zeif, CEO of Stratasys, said, “Current conditions make the job market even more challenging, and we have done our best to provide the departing employees globally with a respectable and fair separation.”
Stratasys, Ltd. Revenue (TTM)
Stratasys, Ltd. revenue-ttm | Stratasys, Ltd. Quote
Stratasys recently released its first-quarter 2020 results, which reflected the impacts of the pandemic on its business. The company witnessed a year-over-year decline in each of its reportable segments and revenues declined a significant 14.4% year over year.
Moreover, it witnessed an operating loss as well as contracting margins. Also, Stratasys has a high-cost structure and remains in the investment mode. Considering the evolving nature of the 3D printing market and the high cost of operations associated with it, we believe that much of the company’s long-term profitability will depend on efficient cost management.
However, an increase in demand for 3D printed medical equipment is a boon for the company. Moreover, its cost-control initiatives are expected to reflect positively on expenses in the coming quarters.
Notably, its efforts to cut SG&A costs helped reduce operating expenses in the last reported quarter by 1.6%. We believe that its downsizing step along with other efforts will help Stratasys tide over the current challenges and attain profitability.
Zacks Rank & Stocks to Consider
Stratasys currently carries a Zacks Rank #4 (Sell).
A few better-ranked stocks in the broader technology sector are Rambus, Inc. (RMBS - Free Report) , Semtech Corporation (SMTC - Free Report) and SYNNEX Corporation (SNX - Free Report) , each sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Rambus, Semtech and SYNNEX is currently pegged at 15%, 12.50% and 9.37%, respectively.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. 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 2020 today >>