Winners And Losers Of Q2: Stratasys (NASDAQ:SSYS) Vs The Rest Of The Industrial Machinery Stocks

Wrapping up Q2 earnings, we look at the numbers and key takeaways for the industrial machinery stocks, including Stratasys (NASDAQ:SSYS) and its peers.

Automation that increases efficiency and connected equipment that collects analyzable data have been trending, generating new demand for industrial machinery and components. Companies that innovate and create digitized solutions can spur sales and speed up replacement cycles while those resting on their laurels can see dwindling market positions. Like the broader industrials sector, industrial machinery and components companies are also at the whim of economic cycles. Consumer spending and interest rates, for example, can greatly impact the industrial production that drives demand for these companies’ offerings.

The 58 industrial machinery stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 1.8% while next quarter’s revenue guidance was 0.8% below.

In light of this news, share prices of the companies have held steady as they are up 3.5% on average since the latest 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 $138.1 million, flat year on year. This print exceeded analysts’ expectations by 0.7%. Despite the top-line beat, it was still a softer quarter for the company with full-year EBITDA guidance missing analysts’ expectations significantly.

“Our results once again reflect resilience from our recurring revenue streams and the reliance customers place on our additive manufacturing technologies," commented Dr. Yoav Zeif, Stratasys' Chief Executive Officer.

Unsurprisingly, the stock is down 8.3% since reporting and currently trades at $10.43.

Read our full report on Stratasys here, it’s free.

Best Q2: Energy Recovery (NASDAQ:ERII)

Having saved far more than a trillion gallons of water, Energy Recovery (NASDAQ:ERII) provides energy recovery devices to the water treatment, oil and gas, and chemical processing sectors.

Energy Recovery reported revenues of $28.05 million, up 3.1% year on year, outperforming analysts’ expectations by 10.3%. The business had an incredible quarter with a beat of analysts’ EPS and EBITDA estimates.

The market seems happy with the results as the stock is up 9% since reporting. It currently trades at $14.83.

Is now the time to buy Energy Recovery? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Icahn Enterprises (NASDAQ:IEP)

Founded in 1987, Icahn Enterprises (NASDAQ: IEP) is a diversified holding company primarily engaged in investment and asset management across various sectors.

Icahn Enterprises reported revenues of $2.32 billion, up 5.3% year on year, falling short of analysts’ expectations by 3%. It was a disappointing quarter as it posted a significant miss of analysts’ EPS estimates.

As expected, the stock is down 8.8% since the results and currently trades at $8.19.

Read our full analysis of Icahn Enterprises’s results here.

Xylem (NYSE:XYL)

Formed through a spinoff, Xylem (NYSE:XYL) manufactures and services engineered products across a wide variety of applications primarily in the water sector.

Xylem reported revenues of $2.30 billion, up 6.1% year on year. This result surpassed analysts’ expectations by 4.2%. It was a stunning quarter as it also put up an impressive beat of analysts’ organic revenue estimates and a solid beat of analysts’ EBITDA estimates.

The stock is up 10.1% since reporting and currently trades at $143.88.

Read our full, actionable report on Xylem here, it’s free.

Watts Water Technologies (NYSE:WTS)

Founded in 1874, Watts Water (NYSE:WTS) specializes in manufacturing water products and systems for residential, commercial, and industrial applications globally.

Watts Water Technologies reported revenues of $643.7 million, up 7.8% year on year. This print beat analysts’ expectations by 5%. Overall, it was a stunning quarter as it also logged an impressive beat of analysts’ organic revenue estimates and a solid beat of analysts’ EBITDA estimates.

The stock is up 6.2% since reporting and currently trades at $280.94.

Read our full, actionable report on Watts Water Technologies here, it’s free.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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