Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. Trade-Ideas LLC identified Stratasys ( SSYS) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Stratasys as such a stock due to the following factors:
- SSYS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $124.4 million.
- SSYS has traded 768,983 shares today.
- SSYS is trading at 8.11 times the normal volume for the stock at this time of day.
- SSYS crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend. EXCLUSIVE OFFER: Get the inside scoop on opportunities in SSYS with the Ticky from Trade-Ideas. See the FREE profile for SSYS NOW at Trade-Ideas More details on SSYS: Stratasys Ltd. provides additive manufacturing (AM) solutions for the creation of parts used in the processes of designing and manufacturing products and for the direct manufacture of end parts. SSYS has a PE ratio of 197.1. Currently there are 12 analysts that rate Stratasys a buy, 1 analyst rates it a sell, and 3 rate it a hold. The average volume for Stratasys has been 1.2 million shares per day over the past 30 days. Stratasys has a market cap of $5.6 billion and is part of the technology sector and computer hardware industry. Shares are down 12.4% year-to-date as of the close of trading on Tuesday. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. TheStreetRatings.com Analysis: TheStreet Quant Ratings rates Stratasys as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share. Highlights from the ratings report include:
- SSYS's very impressive revenue growth greatly exceeded the industry average of 4.6%. Since the same quarter one year prior, revenues leaped by 152.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- SSYS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 5.94, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for STRATASYS LTD is rather high; currently it is at 63.63%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -5.27% is in-line with the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Computers & Peripherals industry. The net income has significantly decreased by 227.8% when compared to the same quarter one year ago, falling from $5.18 million to -$6.63 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Computers & Peripherals industry and the overall market, STRATASYS LTD's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full Stratasys Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.