Earnings season is winding down, with most companies already having reported their quarterly results. But there are still some companies left to report, and Stratasys is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.
Stratasys soared tenfold between early 2009 and the end of 2012 as the 3-D printing industry became one of the hottest investing themes in the stock market. Since then, though, shares have fallen back. Let's take an early look at what's been happening with Stratasys over the past quarter and what we're likely to see in its quarterly report on Monday.
Stats on Stratasys
Analyst EPS Estimate
Change From Year-Ago EPS
Change From Year-Ago Revenue
Earnings Beats in Past 4 Quarters
Source: Yahoo! Finance.
Will Stratasys print money for investors this quarter?
Analysts have had mixed thoughts about Stratasys over the past few months, keeping their estimates for the just-ended quarter flat but raising their earnings-per-share calls for the full 2013 year by $0.15. The stock, however, has fallen back, dropping more than 15% since late November.
Stratasys has found itself on the ground floor of the mammoth opportunity in 3-D printing. Since December, when Stratasys completed its merger with industry peer Objet, the company has been the biggest player in the 3-D printing space. Unlike rival 3D Systems , which has taken aim at the consumer market with its Cubify system priced at $1,299, Stratasys is focused almost solely on commercial and industrial users, with systems starting in the $10,000 range.
But the challenge in investing in 3-D printing right now is that the industry is so much in its infancy that it's hard to predict exactly which direction it will move. Arguably the biggest opportunity for Stratasys is in helping companies with research and development by allowing them to create prototype products rapidly and cheaply. But other applications, including creation of medical devices like prosthetics, also offer considerable revenue potential. Moreover, competition from newly public ExOne will affect Stratasys's strategy, as ExOne seeks to use different materials to print industrial objects, including large metal castings.
Earlier this week, Stratasys saw its shares drop when 3D Systems reported earnings. Despite 53% sales growth over the past year compared to 2011, 3D Systems' valuation was so high that the stock fell, dragging Stratasys and ExOnedown with it.
The key to understanding Stratasys's report is that shares are so loftily priced that they could move in any direction, irrespective of what the company says. Rather than focusing on short-term results, you need to get a view of whether the company's long-term vision is likely to win out over ExOne and 3D Systems. Given the huge long-term opportunity, Stratasys is worth watching even if you decide not to buy its shares.
Find out more about the prospects for 3D Systems to beat out Stratasys by reading our premium research report on 3D Systems. In our report, we take a close look at 3D Systems' opportunities, risks, and critical factors for growth. You'll also find reasons to buy or sell, and receive a full year of analyst updates with the report. To start reading, simply click here now for instant access.
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The article Stratasys Earnings: An Early Look originally appeared on Fool.com.
Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends 3D Systems and Stratasys. The Motley Fool owns shares of 3D Systems and Stratasys and has options positions on 3D Systems. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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