Why Stratasys Shares Are Down 15% Today

Stratasys (SSYS -14.45%) shares were down 14.9% by 12:05 a.m. on Thursday’s mixed earnings.

Wall Street analysts had expected the 3D printing company to lose $0.05 per share in the second quarter, and the good news is that Stratasys beat that estimate — losing “only” $0.04. The bad news is that Stratasys fell well short of Street forecasts for $146.3 million in Q2 sales, reporting just $138 million.

Stratasys Q2 earnings

This news gets worse. The $138 million in sales that Stratasys managed to achieve this quarter represented a 14% year-over-year decline. The company was able to increase sales of consumables (eg 3D printer filament) by 6%. However, in the “current macroeconomic environment,” management says sales of actual 3D printers have declined significantly.

Meanwhile, on the earnings side, it appears that Stratasys’ loss was not less than expected. The loss of $0.04 per share was just a non-GAAP (adjusted) number, you see. Actual earnings calculated according to generally accepted accounting principles (GAAP) showed a loss of $0.36 per share.

Granted, that was better than the $0.56 per share Stratasys lost a year ago in Q2 2023. But it’s still 9x worse than the non-GAAP number.

Is it time to sell Stratasys?

Stratasys responded to the bad news by instituting “focused restructuring actions” and a “comprehensive strategic review.” As part of the restructuring, management says it is laying off 15 percent of its workforce and hopes to cut operating costs by about $40 million by early 2025.

In part because of costs associated with the restructuring, Stratasys warned that losses would widen in Q3 — perhaps as much as $1.50 per share. This is despite management’s hopes for “slightly” better earnings in Q3 than seen in Q2.

All of this adds up to Stratasys likely losing as much as $2.23 per share in the first three quarters of this year — far worse than the $1.21 per share loss Wall Street had estimated for whole of the year. With numbers like these to look forward to, it’s probably time to sell Stratasys stock.