VCA Antech (Nasdaq: WOOF) missed estimates last quarter, and investors hope that it will bounce back and outpace Wall Street's expectations when it unveils its latest earnings on Monday, July 18. VCA Antech is an animal health-care company that provides veterinary and diagnostic testing services and sells diagnostic imaging equipment and other medical-technology products and related services to veterinarians.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on VCA Antech, with six of 11 analysts rating it a hold. Analysts don't like VCA Antech as much as competitor MWI Veterinary Supply overall. Five out of seven analysts rate MWI Veterinary Supply a buy, compared with four of 11 for VCA Antech. Analysts still rate the stock a hold, but they are a bit more wary about it compared with three months ago.
  • Revenue forecasts: On average, analysts predict $383.4 million in revenue this quarter. That would represent a rise of 8.3% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.44 per share. Estimates range from $0.41 to $0.46.

What our community says:
CAPS All-Stars are solidly backing the stock, with 96.7% granting it an "outperform" rating. The community at large agrees with the All-Stars, with 94.7% assigning it a rating of "outperform." Fools are bullish on VCA Antech, though the message boards have been quiet lately, with only 85 posts in the past 30 days. Despite the majority sentiment in favor of VCA Antech, the stock has a middling CAPS rating of three out of five stars.

Management:
VCA Antech's income has fallen year over year by an average of 17.9%. Revenue has now gone up for three straight quarters. The company's gross margin shrank by 2.6 percentage points in the last quarter. Revenue rose 7.4% while cost of sales rose 11.1% to $275.3 million from a year earlier.

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 Q1 Q4 Q3 Q2
Gross Margin 22.5% 20.6% 23.8% 26.4%
Operating Margin 15.1% 11.9% 16.2% 14.8%
Net Margin 8.1% 6.4% 7.6% 8.3%
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