Needham & Company Remains Bullish on Stratasys (SSYS) Following 1Q Report
Needham & Company maintained a Buy rating on Stratasys Inc. (NASDAQ: SSYS), and cut the price target to $26.00 (from $28.00), following the company's 1Q earnings report. Revenues declined to $167.9M, modestly above consensus $165M. Non-GAAP gross margin was better than expected at 55.1%, vs. the consensus of 53.1%. SSYS posted non-GAAP EPS of $0.01, vs. Street expectations of a $0.04 loss.
Analyst James Ricchiuti commented, "Q1 results were modestly better than expected, benefiting mainly from higher gross margins. There were several positive developments in Q1, including signs of recovery in the MakerBot desktop 3D printer business, growth in consumables and key medical and aerospace verticals, and solid expense control. That said, the overall industry environment remains difficult, with mgmt offering a frank assessment that industry demand has not picked up much since Q4, nor does the company’s full-year guidance assume a significant improvement in the market environment in 2016. While we would not rule out further upside EPS surprises from better margins, we believe investors should focus on the potential for stronger earnings leverage in 2017, when we expect to see a better tone to industry demand. We reaffirm our Buy rating."
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Shares of Stratasys Inc. closed at $20.79 yesterday.