3D Printing Company Stratasys is on Way to a Long Rebound

There was a time, a few years ago, when 3D printing was the hottest tech trend in capital markets worldwide. At the time, the star of Israeli 3D printing company Stratasys Ltd. was shining brightly. Then, in 2014, 3D printing experienced a wide-spread crash after investor hype in late 2013 and early 2014 sent company values soaring to billions of dollars, only to be brought down by lower than expected consumer sales. Beginning in 2014, the market value of Nasdaq-listed Stratasys started falling. Between September 2014 and February 2016, the company’s stock price dropped almost 90%.

For daily updates, subscribe to our newsletter by clicking here.

Stratasys is a leading manufacturer of 3D printers and production systems for the aerospace, automotive, healthcare, and consumer products industries. In 2012, the company merged with Objet Ltd., a privately held 3D printer manufacturer based in Israel, and since then has been dually headquartered in Eden Prairie, Minnesota, and Rehovot, Israel.

Stratasys CEO Ilan Levin. Photo: Yoram Reshef

In February, Stratasys published its fourth quarter and annual reports. Stratasys reported revenues of $179.3 million for the fourth quarter of 2017, compared to $175.3 million for the same period last year, and GAAP net loss of $10 million ($0.19 per diluted share), compared to a loss of $14.8 million ($0.30 per diluted share) for the same period last year. For the fiscal year 2017, the company reported revenues of $668.4 million compared to $672.5 million for the fiscal year 2016. Its GAAP net loss for 2017 was $40.0 million ($0.75 per diluted share), compared to $77.2 million ($1.48 per diluted share) for 2016.

Over the course of two years, the company shed 17% of its workforce, bringing the company’s overall headcount to around 2,260 people by the end of 2017.

In 2017, Stratasys shifted its focus from stabilizing its bottom line, reducing costs and improving cash flow, to concentrating on growth, Sergey Vastchenok, managing director at Oppenheimer & Co. investment house, told Calcalist.

The same year it launched several new products, including a prototype printer designed for developers and a 3D printer designed for use in the field of dental medicine, where analysts see tremendous potential for 3D printing technologies.

In its recent reports, Stratasys forecasted annual revenues of $670 million to $700 million for the fiscal year 2018 and GAAP net loss of $41 million to $25 million.

While Stratasys’ revenues have decreased annually since 2014, 2017 appears to have been a turning point. In 2017, Stratasys shifted its focus from stabilizing its bottom line, reducing costs and improving cash flow, to concentrating on growth, Sergey Vastchenok, managing director at Oppenheimer & Co. investment house, told Calcalist.

The same year it launched several new products, including a prototype printer designed for developers and a 3D printer designed for use in the field of dental medicine, where analysts see tremendous potential for 3D printing technologies.

In its recent reports, Stratasys forecasted annual revenues of $670 million to $700 million for the fiscal year 2018 and GAAP net loss of $41 million to $25 million.

Stratasys prospects might derive from entering the metal 3D printing market. In February, the company announced a plan to launch metal 3D printing technology in April 2018.

After years of belt-tightening, the company's cash flow increased last year to $329 million, from $280 million in 2016.

Mr. Vastchenok forecasted that the value of Stratasys’ stock would go up, but that it may take time.