Shares of cloud-based healthcare analytics company Medidata (NASDAQ:MDSO) took a hit Tuesday, falling as much as 14.8% after the company reported its second-quarter results. On the surface, the quarter looked solid. Medidata's second-quarter revenue was about in line the consensus analyst estimates, and the company's adjusted earnings per share (EPS) figure was above the average forecast for the metric. But an analyst downgrade on Tuesday may have spooked some investors.
Shares closed the trading day down 14.4%.
Medidata reported second-quarter revenue and non-GAAP earnings per share of $155.9 million and $0.43, respectively. Revenue was up 15% year over year and compared to a consensus analyst estimate for revenue of $156 million. Non-GAAP EPS was up 46% year over year and ahead of an average forecast for $0.39.
J.P. Morgan analyst Sterling Auty, who downgraded the stock to neutral from overweight (via TheFly), pointed to the company's deceleration in subscription sales growth as one reason for the lower rating. Medidata's subscription revenue increased 16% year over year in Q2, down from 18% growth in Q1.
Medidata was happy with its results, noting in its second-quarter earnings release it "executed well operationally and delivered strong business results this quarter and in the first half of the year..." This performance meant Medidata maintained its outlook for the full year.
Medidata expects full-year revenue between $624 million and $648 million and full-year non-GAAP net income between $90.5 million and $97.5 million.