Merely a day after Stratasys experienced a 15% decline in its stock value due to disappointing sales figures and a substantial GAAP loss for the second quarter of 2024, its main competitor in the 3D printing industry, 3D Systems, reported its earnings for the same period, suffering an 8.15% drop.
The outcomes for 3D Systems mirrored Stratasys but were even more unfavorable.
Similar to Stratasys, 3D Systems fell short of Wall Street’s sales projections, reporting $102.9 million for the quarter, whereas analysts had anticipated $116.5 million. In contrast to Stratasys, which reported a smaller-than-anticipated loss, 3D Systems also missed the earnings forecast, posting a non-GAAP loss of $0.14 per share, compared to the predicted $0.04 loss.
Unsurprisingly, investors are dissatisfied. By 12:30 p.m. ET, the stock of 3D Systems had dropped by 10.5%.
3D Systems Q2 Earnings Overview
Echoing its competitor, 3D Systems saw growth in its services sector but attributed its revenue decline, a 12% drop year over year, to weak hardware sales. Additionally, the company reported worse earnings results under generally accepted accounting principles (GAAP) than under non-GAAP calculations.
For the quarter, GAAP losses amounted to $0.21 per share, which is 50% more severe than the non-GAAP figure.
Should You Sell 3D Systems Stock?
While the current situation appears grim, there is a silver lining. Unlike Stratasys, which is addressing weak sales by restructuring its business, laying off employees, and forecasting a significant loss in the upcoming third quarter, 3D Systems announced today that, due to sequential sales growth (despite a year-over-year decline), it is optimistic enough to raise its guidance for the remainder of this year.
The company projects 2024 sales to be between $450 million and $460 million.
However, even with this optimistic outlook, it is unlikely that 3D Systems will return to profitability in 2024 or in the near future. Sales are projected to be significantly lower than in 2023, marking the fourth consecutive year of declining sales for the company. At best, management is aiming for “near break-even adjusted EBITDA for the fourth quarter” of 2024 alone.
In summary, the outlook for both of these 3D printing stocks appears bleak at present. I would advise against purchasing Stratasys stock—and similarly, I would refrain from investing in 3D Systems stock as well.
