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RadiSys Earnings Preview

By Narrative Science – Updated Nov 7, 2016 at 7:56PM

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RadiSys will unveil its latest earnings tomorrow.

RadiSys (Nasdaq: RSYS) beat estimates by $0.02 last quarter and investors are hoping it can beat them again. The company will unveil its latest earnings tomorrow. RadiSys is a provider of advanced embedded solutions for the communications networking and commercial systems markets.

What analysts say

  • Buy, sell, or hold?: Analysts strongly back RadiSys, with three of four rating it a buy and the remainder rating it a hold. Analysts don't like RadiSys as much as competitor Digi International overall. That rating hasn't budged in three months as analysts have remained steady in their opinion of the stock.
  • Revenue forecasts: On average, analysts predict $74 million in revenue this quarter. That would represent a decline of 1.3% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.06 per share. Estimates range from $0.05 to $0.07.

What our community says
CAPS All-Stars are solidly behind the stock with 91.7% granting it an outperform rating. The community at large backs the All-Stars with 89.8% assigning it a rating of outperform. Fools are gung-ho about RadiSys, though the message boards have been quiet lately with only 36 posts in the past 30 days. Despite the majority sentiment in favor of RadiSys, the stock has a middling CAPS rating of three out of five stars.

Management
The company's gross margin shrank by 2.7 percentage points in the last quarter. Revenue rose 9.4% while cost of sales rose 13.6% to $53.4 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

27.5%

32.7%

30.3%

29.7%

Operating Margin

(0.1%)

(1.7%)

2.3%

1.4%

Net Margin

(0.7%)

(3.1%)

2.9%

0.8%

One final thing: If you want to keep tabs on RadiSys movements, and for more analysis on the company, make sure you add it to your watchlist.

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