Sonic (Nasdaq: SONC) came in under analysts' estimates last quarter, but it has a chance to fix things this quarter. The company, which operates and franchises a chain of quick-service drive-in restaurants in the United States, will unveil its latest earnings on Wednesday.

What analysts say:

  • Buy, sell, or hold?: Five analysts rate the stock as a buy and three call it a sell. Analysts don't like Sonic as much as competitor Jack in the Box (Nasdaq: JACK) and still rate the stock a hold, being a bit more wary about it than three months ago.
  • Revenue forecasts: On average, analysts predict $150.6 million in revenue this quarter, a 3.2% rise from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimates earnings of $0.18 per share. Estimates range from $0.16 to $0.19.

What our community says:
CAPS All Stars are solidly behind the stock, with 86.3% assigning it an "outperform" rating. The community at large backs the All Stars, with 89.5% also giving it an "outperform." Fools are bullish on Sonic and haven't been shy with their opinions lately, logging 214 posts in the past 30 days. Despite the majority sentiment in favor of Sonic, though, the stock has a middling CAPS rating of three out of five stars.

Management:
A year-over-year revenue increase last quarter snaps a streak of three consecutive quarters of declines. Revenue in the most recent fiscal year fell 5.7% in the first quarter, rose 0.7% in Q2, and fell 24% in Q3 and 3.5% in Q4.

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 table shows gross and net margins over the past four quarters.
QuarterQ2Q1Q4Q3
Gross Margin31.3%34.4%37.1%36.1%
Net Margin3.8%5.6%3%7.5%
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