Healthways (Nasdaq: HWAY) hasn't been able to establish an earnings trend, bouncing between beating and falling short of estimates during the past fiscal year. The company will unveil its latest earnings Thursday. Healthways and its wholly-owned subsidiaries provide health and care support solutions to help people maintain or improve their health, and as a result, reduce overall healthcare costs.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Healthways, with nine of 12 analysts rating it hold. 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 $168.5 million in revenue this quarter. That would represent a decline of 3.2% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.18 per share. Estimates range from $0.16 to $0.21.

What our community says:
CAPS All-Stars are solidly backing the stock, with 97.1% granting it an "outperform" rating. The community at large backs the All Stars, with 94.7% assigning it a rating of "outperform." Fools have embraced Healthways and haven't been shy with their opinions lately, logging 133 posts in the past 30 days. Healthways has a bullish CAPS rating of five out of five stars, which is on par with the Fool community assessment.

Healthways' profit has risen year over year by an average of 26%. The company's gross margin shrank by 2.8 percentage points in the last quarter. Revenue fell 9% while cost of sales fell 5.4% to $121.9 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 25.2% 36.9% 29.8% 30.5%
Operating Margin 6.6% 15% 12.1% 12.2%
Net Margin 2.5% 8% 6.2% 6.7%

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