Why Stratasys (SSYS) Stock Is Down Today

NEW YORK (TheStreet) -- Stratasys (SSYS) was falling -5.9% to $88.77 Friday after reaffirming its full-year 2014 guidance, and despite beating analysts' expectations for revenue in the first quarter.

For the first quarter the 3D printer maker reported earnings of 40 cents a share, in-line with analysts' expectations. Revenue grew 54% from the year-ago quarter to $151.2 million. Analysts surveyed by Thomson Reuters expected revenue of $143.11 million.

Looking forward to full-year 2014, Stratasys reaffirmed its guidance that sees earnings of $2.15 to $2.25 a share for the year, and revenue of $660 million to $680 million. Analysts expect EPS of $2.21 a share and revenue of $674.8 million for the year.

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TheStreet Ratings team rates STRATASYS LTD as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate STRATASYS LTD (SSYS) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. 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 find that the company's return on equity has been disappointing."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • SSYS's very impressive revenue growth greatly exceeded the industry average of 4.2%. Since the same quarter one year prior, revenues leaped by 118.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the 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 5.23, 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 65.61%. 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 -1.28% is in-line with the industry average.
  • STRATASYS LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, STRATASYS LTD swung to a loss, reporting -$0.70 versus $0.43 in the prior year. This year, the market expects an improvement in earnings ($2.21 versus -$0.70).
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. 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 analysis from the report here: SSYS Ratings Report

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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.

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