Stratasys Down 48% YTD: Right Time for Investors to Exit the Stock?

Performance and Market Comparison - Stratasys (SSYS) shares have plunged 47.7% year to date, underperforming the Zacks Computer and Technology Sector (up 19.4%) and the Zacks Computer-Peripheral Equipment Industry (down 27.4%) [1] - SSYS has lagged behind peers like Mercury Systems (MRCY, up 0.7%), Immersion (IMMR, up 25.6%), and TransAct Technologies (TACT, down 38%) [1] Financial Results - Total revenues for the first half of 2024 declined 8.8% year over year to $282 million [1] - Product revenues were $192 million (down 8.2%), and service revenues were $89 million (down 9.8%) [1] - The Zacks Consensus Estimate for third-quarter 2024 revenues is $152.6 million, indicating a year-over-year decline of 5.9% [3] - The Zacks Consensus Estimate for 2024 revenues is $570 million, indicating a year-over-year decline of 9.18% [3] Earnings Outlook - The Zacks Consensus Estimate for third-quarter 2024 earnings is 2 cents, down 71.4% over the past 30 days [2] - The consensus mark for full-year 2024 earnings is 5 cents per share, down 64.3% over the past 30 days [2] Challenges and Risks - High interest rates, macroeconomic uncertainties, and reduced capital equipment spending have negatively impacted Stratasys' results [1] - Delayed purchases and longer sales cycles are expected to continue affecting second-half 2024 results [2] Growth Opportunities - The global 3D printing market is estimated to grow from $17.5 billion in 2024 to $37.4 billion by 2029, increasing by 16.4% annually [4] - Stratasys has introduced newer 3D printing technology and partnered with AM Craft to maximize additive manufacturing benefits [4] - The company recently enrolled a patient in a clinical study to analyze the efficacy of 3D-printed models for orthopedic oncology [4] Strategic Initiatives - Stratasys plans to reduce its workforce by 15% to mitigate macroeconomic volatility [5] - The company aims to achieve an EBITDA margin of 8% at current revenue levels by the first quarter of 2025 [5] Valuation and Ranking - Stratasys currently has a Zacks Rank 4 (Sell), suggesting investors should avoid the stock [6] - The Value Score of D indicates a stretched valuation [6]