Looking back on custom parts manufacturing stocks' Q1 earnings, we examine this quarter's best and worst performers, including Stratasys (NASDAQ:SSYS) and its peers.
Onshoring and inventory management–themes that grew in focus after COVID wreaked havoc on global supply chains–are tailwinds for companies that combine economies of scale with reliable service. Many in the space have adopted 3D printing to efficiently address the need for bespoke parts and components, but all companies are still at the whim of economic cycles. For example, consumer spending and interest rates can greatly impact the industrial production that drives demand for these companies’ offerings.
The 4 custom parts manufacturing stocks we track reported a decent Q1; on average, revenues beat analyst consensus estimates by 0.7%. while next quarter's revenue guidance was 1.8% below consensus. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and custom parts manufacturing stocks have had a rough stretch, with share prices down 16.3% on average since the previous earnings results.
Stratasys (NASDAQ:SSYS) Born from the Founder’s idea of making a toy frog with a glue gun, Stratasys (NASDAQ:SSYS) offers 3D printers and related materials, software, and services to many industries.
Stratasys reported revenues of $144.1 million, down 3.6% year on year, in line with analysts' expectations. Overall, it was a mixed quarter for the company with an impressive beat of analysts' earnings estimates but a miss of analysts' Products revenue estimates.
Dr. Yoav Zeif, Stratasys’ Chief Executive Officer, stated, “We delivered solid first quarter operating and financial results that included record consumables revenues, improved gross margins and positive operating and free cash flow, despite the ongoing challenges posed by our customers’ capital spending constraints. We continue to see increased traction for our newest technology, the F3300 FDM system, as leading companies such as Nissan, BAE Systems (LON:BAES) and Sikorsky have joined Toyota as early customers that will benefit with faster, lower-cost manufacturing of end-use parts.”
The stock is flat since reporting and currently trades at $8.80.
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Best Q1: Desktop Metal (NYSE:DM) Originating from a research lab at MIT, Desktop Metal (NYSE:DM) offers 3D printers, production materials, and software to many industries.
Desktop Metal reported revenues of $40.6 million, down 1.7% year on year, in line with analysts' expectations. It was a mixed quarter for the company: Desktop Metal blew past analysts' EPS expectations. Its full-year EBITDA guidance also exceeded Wall Street's estimates. On the other hand, its operating margin missed and its revenue fell short of Wall Street's estimates.
Although it had a great quarter compared its peers, the market seems unhappy with the results as the stock is down 42.7% since reporting. It currently trades at $4.84.
Weakest Q1: Markforged (NYSE:MKFG) Beginning as a start-up at SolidWorks World–an annual design and engineering conference, Markforged (NYSE:MKFG) offers 3D printers and softwares to manufacturers of various industries.
Markforged reported revenues of $20.55 million, down 14.7% year on year, in line with analysts' expectations. It was a weak quarter for the company with a miss of analysts' earnings estimates.
Markforged had the slowest revenue growth in the group. As expected, the stock is down 32.7% since the results and currently trades at $0.41.
Proto Labs (NYSE:PRLB) Pioneering the concept of online quoting and manufacturing for custom prototypes and low-volume production parts, Proto Labs (NYSE:PRLB) offers injection molding, 3D printing, and sheet metal fabrication for manufacturers in various industries.
Proto Labs reported revenues of $127.9 million, up 1.6% year on year, surpassing analysts' expectations by 2.6%. Revenue aside, it was a decent quarter for the company with an impressive beat of analysts' 3D Printing revenue estimates but a miss of analysts' earnings estimates.
Proto Labs pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 10.4% since reporting and currently trades at $34.41.
This content was originally published on Stock Story
