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Stratasys Stock Has Been Volatile in the Past Week

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Shares rose 21.8% last week

Stratasys (SSYS) shares have risen 21.8% in the trailing five-day period ended March 9, 2016. Between February 25, 2016, and March 9, 2016, shares rose more than 30%. SSYS announced its quarterly results on March 3, 2016, when shares rose 17%, bringing it into positive territory for 2016. Then shares fell 7.7% on March 10, 2016, wiping out any gains the stock made since the earnings announcement. SSYS share prices have fallen 57% in the trailing 12-month period.

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Sales have declined 20% YoY

On March 3, 2016, Stratasys announced its 4Q15 and 2015 results. Revenues declined 20% YoY (year-over-year) to $173 million. It was, however, at the high end of the guidance issued by the company. Revenues also beat analysts’ estimates, which were reflected in the increase in its share price.

CEO (chief executive officer) David Reis said in a company press release, “Our fourth quarter results reflect the impact of a market environment that is consistent with conditions we have observed throughout the year.” The company expects growth in its business segments and estimates revenues to grow 3% YoY in 2016 compared to a 7% decline in fiscal 2015.

Investors are also upbeat about SSYS’s reorganization and expect it to increase profitability. In 4Q15, SSYS lowered expenses through a 10% reduction in head count. The company believes it can “achieve a significant improvement in its operating structure in 2016 that will translate into improved operating profit.”

Stratasys expects an operating margin between 3% and 5% in 2016. This would mean an operating profit of $36 million compared to losses posted in the last three fiscal years.

Shares of some companies in the technology, hardware, and storage subsectors have risen in the trailing five-day period. Hewlett-Packard (HPQ), NetApp (NTAP), and Western Digital (WDC) rose 4.2%, 1.9%, and 0.2%, respectively, in the period.

NetApp accounts for 3.1% of the First Trust ISE Cloud Computing ETF (SKYY).

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