Stratasys (SSYS) reported fourth-quarter 2023 non-GAAP earnings of 2 cents per share, failing to meet the Zacks Consensus Estimate significantly and plunging 71.4% compared to the previous year.
The company experienced a 1.8% decline in revenues year over year, totaling $156.3 million, falling short of the consensus estimate by 2.93%. The decrease in revenue was partly attributed to divestitures of certain businesses and adverse effects of foreign currency exchange rates.
Analysis of Price, Consensus, and EPS Performance
Segment-wise, Product revenues dropped by 0.7% year over year to $110.4 million. System revenues within the Product segment decreased by 13.7% to $47.4 million, while Consumables revenues increased by 11.9% to $63 million.
Revenues generated from Services saw a 4.6% decline year over year to $45.9 million. Notably, revenues from Customer Support within the Services category rose by 1.6% to $30.7 million.
Stratasys’ non-GAAP gross profit decreased marginally by 1% from the corresponding period in the previous year, amounting to $76.32 million. Meanwhile, the non-GAAP gross margin expanded by 40 basis points to 48.8%.
Non-GAAP operating expenses showed an increase of 3.2% year over year to $74.3 million. The non-GAAP operating income witnessed a sharp decline of 60.1% to $2.02 million with a contraction of 190 bps, bringing the margin down to 1.3%. Adjusted EBITDA also dropped by 28% to $7.7 million.
Balance Sheet and Additional Insights
By the end of the fourth quarter, Stratasys held cash and short-term deposits amounting to $184.5 million, unchanged from the previous quarter.
Throughout the December-ended quarter, the company utilized $7.7 million in operating cash flow, a decrease from the $18.1 million reported in the prior-year quarter.
Outlook for 2024
Management anticipates revenues for 2024 to fall within the range of $630 million to $645 million, with projected non-GAAP earnings per share between 12 and 19 cents. The company also forecasts a gross margin in the range of 49% to 49.5%, with a projected non-GAAP operating margin of 2.5-3.5%.
Additionally, Stratasys estimates non-operating expenses for 2024 to be between $292 million and $297 million, with an adjusted EBITDA forecasted to be in the range of $40 million to $45 million.
Stock Analysis and Considerations
As of now, Stratasys holds a Zacks Rank #3 (Hold). Year-to-date, SSYS shares have experienced a 12.4% decline.
Notable stocks within the broader Computer and Technology sector such as NVIDIA Corporation (NVDA), Meta Platforms (META), and Amazon.com (AMZN) are currently performing well. NVIDIA and Meta Platforms both carry a Zacks Rank #1 (Strong Buy), while Amazon holds a Zacks Rank #2 (Buy).
Recent Zacks Consensus Estimates demonstrate positive trends, with updated earnings projections showing growth potential and corresponding increases in stock performance for NVIDIA, Meta Platforms, and Amazon.
