Why Stratasys Stock Sank 15% Today

Stratasys (NASDAQ: SSYS) stock fell 14.9% through 12:05 p.m. on mixed earnings on Thursday.

Wall Street analysts had forecast the 3D printing company would lose $0.05 per share in the second quarter, and the good news is that Stratasys beat that estimate -- losing "only" $0.04. The bad news is that Stratasys fell well short of Street forecasts for $146.3 million in Q2 sales, reporting only $138 million.

Stratasys' Q2 earnings

This news gets worse. The $138 million in sales that Stratasys did manage to make in the quarter represented a 14% decline year over year. The company did manage to grow consumables sales (for example, 3D printer filament) by 6%. However, in the "current macroeconomic environment," management says sales of actual 3D printers declined significantly.

Meanwhile on the earnings front, it turns out Stratasys' smaller-than-expected loss was not all it seems. The $0.04-per-share loss was only a non-GAAP (adjusted) number, you see. Actual earnings as calculated according to generally accepted accounting principles ( GAAP ) showed a $0.36-per-share loss.

Admittedly, that was better than the $0.56 per share Stratasys lost a year ago, in Q2 2023. But it's still 9 times worse than the non-GAAP number.

Time to sell Stratasys?

Stratasys responded to the bad news by instituting "focused restructuring actions" and a "comprehensive strategic review." As part of the restructuring, management says it's laying off 15% of its workforce and hoping to cut operating costs by about $40 million by early 2025.

In part because of the costs associated with restructuring, Stratasys warned losses will surge in Q3 -- perhaps as high as $1.50 per share. This is despite management hopes for "slightly" better Q3 revenue than was seen in Q2.

That all adds up to Stratasys probably losing as much as $2.23 per share through the first three quarters of this year -- much worse than the $1.21-per-share loss Wall Street forecast for the whole of the year. With numbers like these to look forward to, it's probably time to sell Stratasys stock.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .