Investors never know what to expect for HMS Holdings (Nasdaq: HMSY), as it has wavered between topping and missing analysts estimates during the past fiscal year. The company will unveil its latest earnings on Friday, July 29. HMS Holdingsration provides a variety of cost containment and payment accuracy services relating to government healthcare programs.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on HMS Holdings with seven of 12 analysts rating it hold. Analysts don't like HMS Holdings as much as competitor Magellan Health Services overall. Five out of six analysts rate Magellan Health Services a buy, compared to five of 12 for HMS Holdings. Analysts still rate the stock a Hold, but they are a bit more wary about it compared to three months ago.
  • Revenue Forecasts: On average, analysts predict $87.8 million in revenue this quarter. That would represent a rise of 24.1% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.40 per share. Estimates range from $0.36 to $0.42.

What our community says:
CAPS All-Stars are solidly behind the stock with 96.5% giving it an "outperform" rating. The community at large agrees with the All-Stars with 95.8% awarding it a rating of "outperform." Fools are keen on HMS Holdings, though the message boards have been quiet lately with only 78 posts in the past 30 days. HMS Holdings has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

HMS Holdings' profit has risen year over year by an average of 32.8%.

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 32.5% 35.3% 34.6% 33.5%
Operating Margin 19.5% 23.6% 22.8% 21.5%
Net Margin 11.9% 14.2% 13.8% 12.9%

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