What Happened?
Shares of 3D printing company Stratasys (NASDAQ:SSYS) jumped 21.3% in the morning session after the company reported impressive third-quarter results that blew past analysts' EPS and EBITDA outperformed Wall Street's estimates. Sales were roughly in line with expectations, enabling the company to meet revenue guidance for the full year. However, sales declined 13.6% year-on-year due to a drop in hardware sales, as customers reduced capital spending amid economic uncertainty. However, the guidance was more optimistic as management expects a slight sequential improvement in hardware sales, particularly in the dental and government sectors. Zooming out, we think this was a solid quarter.
Is now the time to buy Stratasys? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Stratasys’s shares are quite volatile and have had 18 moves greater than 5% over the last year. But moves this big are rare even for Stratasys and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock dropped 20.7% on the news that the company reported second-quarter earnings results. Its full-year revenue, EPS, and EBITDA guidance fell short of Wall Street's estimates. Moving on, the company announced plans to restructure its operations, and this effort will result in the elimination of 15% of its workforce. Overall, this was a weaker quarter.
Stratasys is down 29.2% since the beginning of the year, and at $9.99 per share, it is trading 32.6% below its 52-week high of $14.82 from December 2023. Investors who bought $1,000 worth of Stratasys’s shares 5 years ago would now be looking at an investment worth $543.53.
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
