Ruby Tuesday (NYSE: RT) missed estimates last quarter, and investors hope that it will bounce back and outpace Wall Street expectations. The company will unveil its latest earnings on Thursday, July 21. Ruby Tuesday owns and operates the Ruby Tuesday restaurant chain, which positions itself for the higher end of the bar-and-grill segment of casual dining.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Ruby Tuesday, with six of 10 analysts rating it a hold. Analysts don't like Ruby Tuesday as much as competitor Red Robin Gourmet Burgers overall. Five out of 10 analysts rate Red Robin a buy, compared with four of 10 for Ruby Tuesday.
  • Revenue forecasts: On average, analysts predict $348.8 million in revenue this quarter. That would represent a rise of 11.3% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.31 per share. Estimates range from $0.27 to $0.35.

What our community says:
The majority of CAPS All-Stars see Ruby Tuesday as a good bet, with 56.8% assigning it an "outperform" rating. The community is split on the stock, with 48.6% of Fools awarding it an "outperform" rating and 51.4% an "underperform" rating. Fools have embraced Ruby Tuesday and haven't been shy with their opinions lately, logging 183 posts in the past 30 days. Ruby Tuesday's bearish CAPS rating of one out of five stars falls short of the Fool community's sentiment.

Ruby Tuesday's profit has risen year over year by an average of more than threefold. Revenue has now gone up for three straight quarters. The company's gross margin shrank by 2.9 percentage points in the last quarter. Revenue rose 3.8% while cost of sales rose 7.5% to $264.7 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 Q3 Q2 Q1 Q4
Gross Margin 17% 15.5% 19.1% 20.3%
Operating Margin 6.1% 2.7% 6.1% 9.6%
Net Margin 5% 1.6% 4.1% 6.7%
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