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Stratasys Ltd. (SSYS) is Gaining Momentum on Earnings Catalyst

Stratasys Ltd. (NASDAQ: SSYS), a developer of 3D printing technology, recently released a favorable first-quarter report. The firm improves its profitability by increasing sales of high-margin consumables and components.

Stratasys, like many other creative businesses, suffers losses as a result of the costs of integrating new technology into existing manufacturing processes. However, Stratasys’ capacity to boost margins was demonstrated in the Q1 2022 report. 

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Stratasys’ gross margin improved to 42.6 percent in the quarter, while sales increased to $163.4 million from $134.2 million the year before. The GAAP loss per share remained at $0.32.

Stratasys is extending its 3D printer lineup, which now includes medical printers. As a consequence, the sale of consumables and spare parts generates consistent cash flow. The “razor and blades” business model is an ancient, tried-and-true business strategy in which the “razor” (primary equipment) is sold very inexpensively, and the company’s major profit comes from the “blades” (consumables and parts).

Stratasys had its best quarter in six years in the first quarter of 2022. In addition to higher margins, sales of 3D printers and associated goods and services surged by 36.7 percent. Stratasys printing plastic sales are strong despite fierce competition, which is a positive indication. Although there are many alternative 3D printing polymers on the market, customers choose Stratasys materials.

The freshly obtained Origin P3 printers, as well as the Stratasys Neo range of high-volume printers, are selling well. This is particularly significant since 3D printing is rapidly becoming a full-fledged industrial technology, whereas it was previously limited to specific applications such as prototyping. This scalability means more revenue and improved profits for Stratasys.

SSYS stock rose 14.51 percent in the previous week but fell -12.56 percent in the previous month. This company’s stock dropped -32.01 percent in the previous quarter. The stock has been down -42.48 percent in the previous six months, with a year-to-date loss of -12.60 percent. This stock’s year-to-date (YTD) price performance is presently -22.99 percent at the time of writing.

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