Investors are braced for a bumpy ride ahead of MedCath's (Nasdaq: MDTH) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings on Tuesday, August 9. MedCath is a health-care provider and is focused primarily on high acuity services, including the diagnosis and treatment of cardiovascular disease.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand form on MedCath with analysts unanimously rating it hold. Analysts don't like MedCath as much as competitor Select Medical Holdings overall. Six out of 10 analysts rate Select Medical Holdings a buy compared to zero of four for MedCath. Analysts' rating of MedCath has stayed constant from three months prior.
  • Revenue forecasts: On average, analysts predict $85.8 million in revenue this quarter. That would represent a decline of 34.9% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.09 per share. Estimates range from $0.06 to $0.11.

What our community says:
CAPS All-Stars are solidly behind the stock, with 95.3% awarding it an "outperform" rating. The community at large backs the All-Stars, with 90.3% granting it a rating of "outperform." Fools are gung-ho about MedCath, though the message boards have been quiet lately with only 38 posts in the past 30 days. Despite the majority sentiment in favor of MedCath, the stock has a middling CAPS rating of three out of five stars.

Management:
Revenue has fallen for the past three quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

76.1%

41.9%

57.3%

39.1%

Operating Margin

(17.6%)

(1.8%)

(46.4%)

(17%)

Net Margin

(13.9%)

41.7%

(42%)

(9.7%)

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