Stratasys (SSYS) Shares are Already Washed Out - Needham & Company
Needham & Company analyst James Ricchiuti lowered his price target on Stratasys Inc. (NASDAQ: SSYS) to $21.00 (from $24.00) following its Q3 miss and weak guidance but maintained a Buy rating, saying shares are washed out at current levels.
Ricchiuti commented, " SSYS turned in a disappointing Q3 report prior to the open today, reflecting continued weak conditions in the core prototyping business. Revs came in 10% below Street expectations and declined 6% y/o/y. SSYS managed to break even on a non-GAAP basis, mainly the result of lower non-GAAP operating expense. Mgmt remains cautious near term and lowered its full-year outlook for revenues to $662M-$673M from $700M-$730M previously, which implies that Q4 revenues will be down 5% to up 1% y/o/y, below Street expectations. SSYS shares are trading at less than 1x EV/out-year sales and we believe offer value for investors looking out to what we expect will be a better demand environment in 2017, driven in part by increased penetration of additive manufacturing applications in markets like aerospace and medical."
The firm is cutting Q4 non-GAAP EPS est. to $0.04 from $0.14 and rev estimate to $170M from $187M.
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Shares of Stratasys Inc. closed at $20.50 yesterday.