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Can Stratasys (SSYS) Pull a Surprise This Earnings Season?


Stratasys Ltd. SSYS is set to report second-quarter 2017 results on Aug 9. Last quarter, the company posted in-line earnings. Let's see how things are shaping up prior to this announcement.

Factors at Play

Stratasys reported modest first-quarter results, wherein the top and bottom lines came in line with the respective Zacks Consensus Estimate. The bottom-line results, which displayed year-over-year improvement, were also encouraging.

The seeds which Stratasys sowed four years ago have finally started to yield results for the company. It recently announced obtaining a contract to manufacture flight parts for Airbus’ A350 XWB aircraft.

Stratasys announced that Airbus has selected its wholly owned subsidiary – Stratasys Direct Manufacturing – to produce 3D printed non-structural polymer parts, such as brackets, and other parts used for system installation, for the aforementioned aircraft. We believe that the company’s portfolio of innovative products will help it generate incremental sales over the long run.

In a move to further strengthen presence in New Zealand, Stratasys Asia Pacific, a subsidiary of Stratasys had also recently entered into a partnership with Ricoh New Zealand Ltd. (Ricoh New Zealand), a subsidiary of Ricoh Company, Ltd. Japan. The collaboration will cater to the demand for 3D printing solutions in the region.

It seems that Stratasys’ turnaround strategies, which include launching innovative products, strategic partnerships and acquisitions, along with improving cost efficiencies, are paying off. These initiatives will help Stratasys to gain more market share as the prospect of 3D printing industry appears bright.

Stratasys, Ltd. Price and EPS Surprise

Earnings Whispers

Our proven model does not conclusively show that Stratasyswill beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Stratasys ESP is 0.00% since both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 1 cent. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Stratasys’ Zacks Rank #3 when combined with a 0.00% ESP makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Stocks to Consider

Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

The Priceline Group Inc. PCLN, with an Earnings ESP of +2.31% and a Zacks Rank #3.

Sun Life Financial Inc. SLF, with an Earnings ESP of +2.70% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Bio-Techne Corp TECH, with an Earnings ESP of +1.10% and a Zacks Rank #2.

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