Neutral Tandem (Nasdaq: TNDM) came in right in line with the Street's expectations last quarter, but investors are hoping it will beat them this quarter. The company will unveil its latest earnings Tuesday. Neutral Tandem provides tandem interconnection services principally to competitive carriers, including wireless, wireline, cable, and broadband telephony companies.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Neutral Tandem with eight of 11 analysts rating it hold. Analysts don't like Neutral Tandem as much as competitor Consolidated Communications Holdings overall. Two out of five analysts rate Consolidated Communications Holdings a buy compared with three of 11 for Neutral Tandem. 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 $66.7 million in revenue this quarter. That would represent a rise of 49.1% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.24 per share. Estimates range from $0.20 to $0.28.

What our community says:
CAPS All-Stars are solidly backing the stock with 98.2% awarding it an "outperform" rating. The community at large agrees with the All-Stars with 98% assigning it a rating of "outperform." Fools are gung-ho about Neutral Tandem and haven't been shy with their opinions lately, logging 332 posts in the past 30 days. Neutral Tandem has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Neutral Tandem's income has fallen year over year by an average of 19.9%. Revenue has now gone up for three straight quarters. The company raised its gross margin by 5.5 percentage points in the last quarter. Revenue rose 48.2% while cost of sales rose 29.9% to $25.8 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.






Gross Margin





Operating Margin





Net Margin





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