Stratasys...The Day After

Stratasys, Ltd. SSYS disappointed investors Tuesday following the release of weak Q1 preliminary results.

The stock tumbled amid the news and traded at $41.21 Wednesday, down 19.67 percent.

Analysts were quick to weigh in on the announcement. Below are highlights along with current ratings and price targets.

Morgan Stanley - Equal Weight, $53 price target

“Stratasys announced preliminary 1Q revenue and EPS 16% and $0.27 below our model. The company noted five reasons for the shortfall including capital spending constraints, currency, new product introductions, and a slower channel ramp in Asia. However, in our opinion most concerning reason is the consolidation within the channel. The 3D printing industry is believed to be in the early stages of adoption which is inconsistent with go-to-market consolidation trends.”

Pacific Crest Securities - Sector Weight, no price target

“While market factors are beyond its control, we view Stratasys' reactionary model adjustments as erratic at a time when the company needs to focus intensely on innovation (R&D) and strengthening sales and marketing efforts.”

Jefferies - Buy, $60 price target

“We had previewed that SSYS would miss Q1, but results were even weaker than we expected. We estimate SSYS's core product revs (i.e., ex MakerBot) were down Y/Y (a sharp deceleration vs. +26% in Q4), and 2015 guidance implies only mid-single digit growth (vs. prior guide >25% and 2014's +32%). SSYS and [3D Systems Corporation DDD] gave a litany of reasons for their Q1 misses but seem uncertain what the growth of the 3D printing industry will be in 2015 and 2016.”

Canaccord - Hold, $45 price target

“We are substantially reducing our below-consensus estimates following today's preannouncement for Q1 and lower 2015 outlook. In its press release, management confirmed weak demand in the US, footing with reseller feedback referenced in our downgrade Monday and our April 14th note ‘Slow start in transition year.’ Based on our expectations for slower long-term growth, we believe more estimate cuts could be forthcoming, especially with potentially lower rates of materials consumption on the heels of stalling systems demand.”

Brean - Hold, no price target

“SSYS’s 8 new products intro’d in 2H14 that have ‘rounded out’ (our term) its Connex Triple Jetting Technology portfolio has resulted in slower-than-expected adoption of the high-end Connex platforms withiStrn the channel and delays in customer purchases. We believe that longer evaluation and cannibalization may be occurring.”

Oppenheimer - Perform, no price target

“Following its major competitor, Stratasys pre-announced severe cuts to 1Q15 and 2015 forecasts. 3D Systems' effort to explain the sharp pullback in unit demand was lacking, and Stratasys really doesn't try. It is positive in a way that the issue is industry and not firm-specific, but as it clashes with the tone at AMUG it is perplexing just the same. Eventually numbers will be gutted enough that investor confidence can begin to be rebuilt. But until that becomes more visible, we will retain a more cautious Perform rating.”