Does Stratasys Guidance Signal the End of 3D Printing Fever?

3D printing
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Stratasys Ltd. (NASDAQ: SSYS) reported preliminary full-year 2014 earnings Monday after markets closed for the day. The 3D printer maker reported expected 2014 adjusted earnings per share (EPS) in the range of $1.97 to $2.03. On a GAAP basis Stratasys projects a loss of $2.32 to $2.58 per share. The company did not release quarterly figures or revenue estimates. The consensus estimate for full-year earnings is $2.25 per share.

The big news is the company’s 2015 guidance. For the 2015 fiscal year the company expects revenues in the range of $940 million to $960 million and adjusted EPS of $2.07 to $2.24. Consensus estimates call for EPS of $2.91 on revenues of $1.01 billion. The company said it believes that manufacturers are poised to increase adoption of additive manufacturing in a broad range of industries and the company has decided to invest more in order to offer a broader range of products.

Here is what Stratasys had to say:

As a result of its new investment plan, Stratasys expects incremental annual operating expenditures of 2% of anticipated revenues for [the] coming two to three years, with total operating expenses in 2015 to be in the range of 46% to 47% of anticipated revenues. Additionally, the Company expects to incur capital expenditures in the range of $160 to $200 million in 2015. The Company also expects an effective tax rate of 5% to 10%.

The company said the investment plan is designed to support annual revenues of $3 billion in 2020.

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Stratasys also reiterated its long-term operating model:

  • Annual organic revenue growth of at least 25%
  • Non-GAAP operating income as a percentage of sales of 18% to 23%
  • Non-GAAP effective tax rate of 10% to 15%
  • Non-GAAP net income as a percentage of sales of 16% to 21%

The company’s three-quarter total EPS is $1.53, and analysts were looking for $0.73 in the fourth quarter to reach the consensus of $2.25 for the year. Stratasys is on track to miss the quarterly consensus by $0.18 to $0.22. And while it did not say anything about revenues, one could conclude that the quarterly consensus of $230.54 million is out of reach and so is the annual consensus of $763.63 million.

Once hot and now not — that’s the story of the 3D printing sector. Peer/rival 3D Systems Corp. (NYSE: DDD) traded at a new 52-week low in the after-hours session Monday. Other 3D printer makers The ExOne Co. (NASDAQ: XONE) and Voxeljet A.G. (NYSE: VJET) were inactive after hours.

Shares of Stratasys were down more than 26% at $59.00, way below the 52-week bottom of $70.00. The stock’s 52-week high is $131.09. The consensus estimate for the stock is around $122.00. Stratasys will hold a conference call at 8:30 a.m. ET on Tuesday to discuss these preliminary results.

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