Investors with a long-term horizong may find it valuable to assess Stratasys Ltd’s (NASDAQ:SSYS) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how Stratasys is currently performing. View out our latest analysis for Stratasys
Could SSYS beat the long-term trend and outperform its industry?
SSYS is loss-making, with the most recent trailing twelve-month earnings of -US$39.16m (from 31 March 2018), which compared to last year has become less negative. Furthermore, the company’s loss seem to be growing over time, with the five-year earnings average of -US$229.02m. Each year, for the past five years SSYS has seen an annual increase in operating expense growth, outpacing revenue growth of 19.17%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Eyeballing growth from a sector-level, the US tech industry has been growing, albeit, at a subdued single-digit rate of 6.25% over the prior year, and 8.10% over the past half a decade. This shows that, while Stratasys is presently running a loss, it may have gained from industry tailwinds, moving earnings in the right direction.
Although Stratasys is loss-making, its has a good cash runway to meet its upcoming operating expense (should SG&A and one-year R&D remain constant at the current level of US$344.53m) over the next year. This is a strong indication of good cash management.
What does this mean?
Though Stratasys’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always difficult to predict what will happen in the future and when. The most valuable step is to assess company-specific issues Stratasys may be facing and whether management guidance has regularly been met in the past. You should continue to research Stratasys to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for SSYS’s future growth? Take a look at our free research report of analyst consensus for SSYS’s outlook.
- Financial Health: Is SSYS’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.