MINNEAPOLIS & REHOVOT, Israel - Stratasys Ltd. (NASDAQ:SSYS), a global leader in polymer 3D printing solutions, today announced a new share repurchase program approved by its Board of Directors. The company is now authorized to buy back up to $50 million of its ordinary shares, signaling confidence in its long-term growth strategy and commitment to shareholder value.
The repurchase program is a strategic component of Stratasys' broader plan to optimize cash flow and enhance capital allocation. This announcement follows a series of restructuring initiatives aimed at aligning the company's resources with market demands, including a workforce reduction of approximately 15% and a focus on high-growth products and solutions. These restructuring efforts are anticipated to yield $40 million in annual cost savings starting in the first quarter of 2025.
Stratasys CEO Dr. Yoav Zeif emphasized the company's dedication to strengthening its financials, stating, "Our focus is on generating significantly higher profit and cash flow by driving revenue, aligning costs and reinvesting in growth initiatives." He added that the repurchase program reflects the Board's belief in the company's ability to deliver long-term profitable growth.
The repurchase of shares will be conducted over time, subject to market conditions and other factors, including the company's cash position, financial results, and liquidity. Stratasys plans to fund the buybacks using its balance sheet cash and ongoing cash flow.
Stratasys has positioned itself as an innovator in the 3D printing industry, catering to sectors such as aerospace, automotive, healthcare, and education. The company's solutions are designed to offer competitive advantages throughout the product value chain.
This share repurchase program is in line with U.S. securities laws and may include open market purchases, privately negotiated transactions, or other methods. Stratasys may also utilize Rule 10b5-1 plans to facilitate the repurchases.
The information reported is based on a press release statement by Stratasys Ltd. and reflects the company's current plans and expectations regarding its share repurchase program and financial strategy.
In other recent news, Stratasys Inc. has been the subject of several analyst adjustments following its second-quarter earnings report. Loop Capital reduced its price target for the company from $9.00 to $7.00, maintaining a Hold rating. Similarly, Lake Street Capital Markets cut its price target from $15.00 to $11.00, but affirmed a Buy rating. Cantor Fitzgerald also lowered its price target from $23 to $12, while keeping an Overweight rating.
Stratasys reported a decrease in product revenue by 14.2% year-over-year, with hardware sales dropping 40% in the same period. However, the company saw a 6.3% increase in consumables revenue, indicating high utilization rates across its installed base of systems. Amid these mixed results, Stratasys announced a restructuring plan, including a 15% reduction in workforce, aimed at saving approximately $40 million annually starting in 2025.
The cost-cutting measures are expected to concentrate on new research and development, leveraging the company's strong position in polymer technologies. Despite the present challenges, Stratasys remains optimistic about its long-term growth, expecting to generate positive cash flow starting in Q4 2024 and aiming to reach $1 billion in revenue by 2026. These are the recent developments for Stratasys.
InvestingPro Insights
In light of Stratasys Ltd.'s recent announcement regarding its new share repurchase program, some key metrics from InvestingPro offer additional insights into the company's financial health and market performance. With a market capitalization of approximately $501.48 million and a price-to-book ratio for the last twelve months as of Q2 2024 at 0.59, the company appears to be valued below its book value, which may indicate an undervaluation by the market.
Despite the company's proactive measures to optimize cash flow and enhance shareholder value, Stratasys has experienced a notable decline in revenue growth, with a -4.76% change over the last twelve months as of Q2 2024. The company's gross profit margin remains strong at 44.69%, reflecting its ability to maintain profitability at the operational level.
An InvestingPro Tip reveals that Stratasys holds more cash than debt on its balance sheet, which supports the company's strategy to fund the share buybacks using its balance sheet cash and ongoing cash flow. Additionally, another InvestingPro Tip indicates that while the company has not been profitable over the last twelve months, analysts predict that Stratasys will turn profitable this year. This forecast aligns with the company's goal of achieving higher profit and cash flow through strategic initiatives.
For investors seeking a deeper analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/SSYS that provide further insights into Stratasys' market trends and financial performance.
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