How Should You Play Stratasys Stock After $120M Fortissimo Deal?

Stratasys Ltd. SSYS, a leader in polymer 3D printing solutions, has successfully closed a $120 million strategic investment from Fortissimo Capital, a move that significantly bolsters the company's financial position amid ongoing industry challenges. The investment, which was first announced in March and closed on April 10, 2025, provides Fortissimo with approximately 14% ownership of Stratasys' outstanding ordinary shares through the purchase of 11,650,485 newly issued shares at $10.30 each.With the investment, Yuval Cohen, Founding and Managing Partner of Fortissimo, joins Stratasys' board of directors, replacing Dr. Yoav Zeif, who volunteered to step down. Cohen brings more than 30 years of financial and leadership experience that could help drive Stratasys' strategic goals.The partnership with Fortissimo, a leading Israeli private equity fund investing in technology and industrials, represents a strong vote of confidence in Stratasys' strategy and growth potential.Strategic Repositioning for SSYS in Challenging MarketThe investment comes at a critical time for Stratasys, which has been navigating a challenging macroeconomic environment characterized by constrained capital expenditures and prolonged sales cycles. In its fourth-quarter 2024 earnings report, Stratasys reported revenues of $150.4 million, down 3.8% year over year, with full-year 2024 revenues declining 8.8% to $572.5 million compared to 2023.Despite these headwinds, the company has made significant progress in restructuring its operations and improving profitability metrics. Non-GAAP gross margin expanded to 49.6% in fourth-quarter 2024, up from 48.8% in the prior-year period, demonstrating a focus on operational efficiency. Adjusted EBITDA reached $14.5 million in the quarter, representing 9.6% of revenues.The recent cost-saving initiatives announced last year took effect primarily in the fourth quarter, making these results more indicative of the expected future impact of these initiatives on an annualized basis.For 2025, Stratasys has provided guidance of $570-$585 million in revenues, with non-GAAP operating margins of 4-5% and adjusted EBITDA of $44-$50 million. The company expects improved operating and free cash flow compared to 2024.The Zacks Consensus Estimate for SSYS’ 2025 earnings is currently pegged at 29 cents per share, down 2 cents over the past 30 days. The consensus mark for SSYS’ 2025 revenues is pegged at $566.23 million, indicating year-over-year decline of 1.09%. Stratasys, Ltd. Stock Price and Consensus Stratasys, Ltd. price-consensus-chart | Stratasys, Ltd. QuoteFind the latest EPS estimates and surprises on Zacks Earnings Calendar.Stratasys Focuses on Manufacturing Applications A key element of Stratasys' strategy is its focus on end-part manufacturing applications, which accounted for 36% of revenues in 2024, up from 34% in 2023 and just over 25% in 2020. The company expects this percentage to continue growing, with manufacturing eventually becoming the majority of its business.Stratasys has also been expanding its technology portfolio through strategic partnerships. Recent announcements include the integration of trinckle 3D's fixturemate software into Stratasys' GrabCAD Print Pro platform, which automates fixture design and broadens the accessibility of 3D printing technology for manufacturing applications. The company has also introduced PolyJet ToughONE, a new material engineered for tough and durable functional prototyping.Investment Considerations for SSYS StockDespite these positive developments, investors might want to hold their positions or wait for better entry points rather than adding significantly to Stratasys’ positions at current levels. SSYS shares have lost 34.9% over the past year, underperforming the Zacks Computer and Technology sector’s appreciation of 30.4%. SSYS shares have also underperformed industry peers like Immersion IMMR, Alps Electric APELY and Logitech International LOGI in the same time frame. While IMMR and APELY shares have appreciated 29.2% and 9.3%, respectively, LOGI shares have lost 10.9% over the past six months.While the Fortissimo investment provides validation of Stratasys' strategy and bolsters its financial position, the broader macroeconomic challenges affecting capital expenditures are likely to persist through at least part of 2025.This reality is reflected in the company's guidance, which projects gradual improvement throughout 2025 with stronger performance in the second half. The management expects revenues to grow sequentially each quarter through the year, with the first quarter having the softest revenue and margin profile.Given these factors, investors might benefit from monitoring Stratasys' execution of its strategy and awaiting clearer signs of market recovery before significantly increasing positions. The Fortissimo investment provides a solid foundation for long-term growth, but patience may be rewarded with more attractive entry points as the company navigates through 2025. SSYS carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Logitech International S.A. (LOGI): Free Stock Analysis Report Stratasys, Ltd. (SSYS): Free Stock Analysis Report Immersion Corporation (IMMR): Free Stock Analysis Report Alps Electric (APELY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks