Tag Archives: ssys

Apple Earnings Quality Better Due To GAAP-Only Reporting, Says UBS

Apple ( AAPL ), IBM, and Cisco Systems ( CSCO ) have higher earnings quality than some 3D printer makers, based on their GAAP vs. non-GAAP accounting, says UBS. Tech companies, and some others, typically report both non-GAAP  earnings — which exclude stock options grants to employees and often other items — and earnings under GAAP (generally accepted accounted principles), which include everything. Financial analysts typically provide non-GAAP estimates for quarterly results, and those numbers frequently get more play in quarterly earnings stories in the business press. “Non-tech investors sometimes recoil at the liberal non-GAAP reporting by tech companies and its acceptance by investors,” noted UBS analyst Steven Milunovich in the research report. Milunovich says a large difference between GAAP and non-GAAP earnings should be taken into account in assessing a stock’s price-to-earnings, or P/E, ratios. “Apple’s financial statements embody the same user-friendly nature as its products in only reporting GAAP numbers,” he wrote. Milunovich also said the GAAP to non-GAAP EPS difference for  IBM ( IBM ) is just “modest,” and is a “relatively conservative” 12% for Cisco. IBM is slated to report its Q1 earnings on April 18, and Apple on April 25. IBM stock fell 0.3% to 152.07 on the stock market today. Apple rose 1% to 111.12, closing just below Apple’s 200-day line after the stock topped that key level intraday for the first time in 2016. Milunovich is the second tech analyst in a week to take a close look at GAAP vs. non-GAAP earnings. Citigroup analyst Mark May last week slashed his price target on LinkedIn ( LNKD )  and also lowered its targets on shares of  Amazon.com ( AMZN ),  Alphabet ( GOOGL ),  Facebook ( FB ) and  Netflix ( NFLX ) in a report that examined the earnings dilution from stock compensation grants . Milunovich says restructuring charges also impact GAAP vs. non-GAAP accounting. The UBS analysts flagged the leading makers of 3D printers. He said that in 2015 “both Stratasys ( SSYS ) and 3D Systems ( DDD ) had large impairments, especially Stratasys’ write-off of MakerBot, creating the biggest gaps (in GAAP vs. non-GAAP accounting)” among the companies he looked at. Storage vendors including Nimble ( NMBL ), NetApp ( NTAP ) and EMC ( EMC ) also had relatively large differences in GAAP vs. non-GAAP earnings, he wrote.

HP’s Thrust Into 3D Printers Could Torch 3D Systems, Stratasys

The entry of HP Inc. ( HPQ ) into the 3D printer market is seen as creating problems for 3D Systems ( DDD ) and Stratasys ( SSYS ), causing an analyst to issue a warning about the two market leaders. While 3D Systems and Stratasys are the two largest providers of 3D printers, HP (formerly Hewlett-Packard before its split) will gain market share over time, wrote UBS analyst Steven Milunovich in a research note. He reiterated a sell rating on Stratasys with a price target of 19. UBS also has a sell rating on 3D Systems and a price target of 9. Stratasys stock was up almost 3%, near 26, during afternoon trading in the stock market today . 3D Systems was near 15, down a fraction. The stocks of 3D Systems and Stratasys, having collapsed over the past two years due to numerous problems, are up sharply since recently hitting bottom. Despite the improvement and expectations of a turnaround, Milunovich believes that HP will be a disruptor. He says that HP expects to formally announce its first product in a few months, with availability by year end. “We expect HP to discuss betas with large industrial companies and provide impressive performance metrics,” Milunovich wrote. He also said, “(HP) indicates little interest in acquiring either Stratasys or 3D Systems, which surprises us.” He believes that HP could gain broader technology, patents, channels and, with 3D Systems, metals capability, via an acquisition of one or the other. HP has also said that it plans to avoid the consumer market, where 3D Systems and Stratasys have flailed. 3D printer revenue, including supplies, is expected to top $7 billion this year and approach $10 billion by 2017. Despite the struggles of 3D Systems and Stratasys, the 3D printing industry is stronger than it seems , say industry analysts who track the field. Among companies with big investments in 3D technology are Nike ( NKE ) and General Electric ( GE ). Nike has used 3D printers to develop several sport shoes, while General Electric uses them to produce advanced jet-engine fuel nozzles.

ExOne Drops, But Q4 Earnings Add More Hope To 3D Printer Turnaround

ExOne ( XONE ) late Tuesday became the third 3D printer maker to report better-than-expected earnings for its most recent quarter, adding more hope for a turnaround in the beleaguered industry, even though 3D printer stocks fell Wednesday. After the market close Tuesday, ExOne reported Q4 revenue of $16.2 million, topping expectations of $14.7 million. Revenue rose 2.5% year over year, reversing three straight quarters of revenue deceleration. The company lost eight cents per share minus items, but that was seven cents better than the consensus estimate of analysts polled by Thomson Reuters. 3D Systems ( DDD ) and Stratasys ( SSYS ), the two largest providers of 3D printers, both also  beat expectations  with their Q4 earnings reports. ExOne stock initially rose as much as 7.5% in the stock market today , hitting an 11-month high near 14, but it closed Wednesday down 6.3%, at 12.12. That’s up from an all-time low of 6.61, touched on Jan. 20. Stratasys stock fell 8.6% Wednesday to 23.25, while 3D Systems fell 5.1% to 14.44. 3D Systems and Stratasys had soared over a two-year period that ended as 2013 came to a close. ExOne went public in February 2013 with shares priced at 18. The stock had traded above 70 in early January 2014, then headed downhill. All three gave back their gains starting in 2014 as the promise of 3D printing seemed to fade with disappointing quarterly earnings reports. 3D Systems stock hit its record low of 6 set on Jan. 20. Stratasys touched a record low of 14.88 set on Jan. 26. Some analysts continue to hold a cautious tone on 3D printing stocks. After Stratasys reported its Q4 earnings, Cowen analyst Robert Stone said that its visibility was still limited, though he raised his price target on the company to 23 from 19. 3D Systems, in its Q4 earnings release, said that industry conditions remain challenging. But Terry Wohlers, president of Wohlers Associates, which provides technical, market and strategic analysis on the 3D printer market, is upbeat. He says that corporations, governments and universities have embraced 3D printing technology. “If you look at the industry through the lens of investors and share price, that will give you a distorted view of what’s happening in the 3D printer market,” Wohlers told IBD.