Stratasys SSYS Anticipated to Report Lower Earnings in Q3 Results

As Stratasys Ltd. SSYS, known for its connected, polymer-based 3D printing solutions, prepares to release its earnings report for the third quarter of 2023, expectations are set for a potential reduction in both earnings and revenue. Located in Eden Prairie, Minnesota, the company has been a leader in the 3D printing space, but the upcoming financial results may show signs of struggle.

Earnings Expectations for Stratasys

The consensus among analysts indicates that Stratasys is projected to report quarterly earnings of $0.04 per share, a decline of 20% compared to the same period in the previous year. Additionally, revenue forecasts are pegged at $161.72 million, which would be a slight decrease of 0.3% year-over-year.

Several factors can influence the stock price immediately post-earnings announcement, such as the figures meeting or exceeding projections, as well as insights provided by company management during the earnings call. The anticipation surrounding these numbers can cause notable stock price movements.

Analyzing the Consensus Estimate

The consensus earnings per share (EPS) estimate for Stratasys has remained static over the last 30 days. This suggests analysts have not altered their outlook significantly, maintaining their earlier predictions for the company's quarterly performance.

A discrepancy between an analyst's most recent estimates and earlier ones can reflect changing sentiments towards a company’s earnings outlook.

Understanding Earnings Surprise Potential

The Zacks Earnings ESP (Expected Surprise Prediction) is a model that contrasts the Most Accurate Estimate—a recent update of consensus EPS numbers—with the Zacks Consensus Estimate to forecast earnings surprises. The significance of this model arises from its focus on recent analyst revisions, which may contain the latest and potentially more accurate information.

However, a positive reading is generally considered a more reliable indicator of a forthcoming earnings beat. When coupled with a favorable Zacks Rank, it can suggest a likelihood of outperforming earnings expectations.

In the case of Stratasys, the Earnings ESP stands at -18.18%, indicating a less favorable outlook from analysts just before the earnings release. Furthermore, with a Zacks Rank of #3, predicting an earnings beat with high confidence becomes more challenging.

Past Performance and Earnings History

Stratasys has previously surprised analysts with its earnings results, notably last quarter, where it delivered a surprise of +233.33% against the expected per-share loss. The company has consistently surpassed consensus EPS estimates in the preceding four quarters.

Though historical performance can influence expectations, it is not always a reliable indicator of future results, and stock movement can be swayed by numerous other factors aside from earnings outcomes.

Final Thoughts on Stratasys' Earnings Outlook

While an earnings beat can be a sign of a stock's potential rise, not all companies that surpass their earnings estimates see their stock appreciate. Conversely, stocks sometimes elevate despite failing to meet earnings predictions due to unforeseen positive drivers.

Given Stratasys's current projections and Earnings ESP, it does not emerge as a strong candidate for an earnings beat. Nevertheless, investors should also consider other metrics and industry-related developments when evaluating the stock's prospects in the wake of the earnings announcement.

Stratasys, Earnings, Expectations