Watch Arctic Cat's (Nasdaq: ACAT) earnings report to see if it can beat analyst expectations for the fifth consecutive quarter. The company will unveil its latest earnings on Thursday, Oct. 27. Arctic Cat operates, designs, engineers, manufactures, and markets snowmobiles and all-terrain vehicles (ATVs), as well as related parts, garments, and accessories under the Arctic Cat brand name.

What analysts say:

  • Buy, sell, or hold?: The majority of analysts back Arctic Cat as a buy. But with 60% of analysts rating it a buy, Arctic Cat is still below the mean analyst rating of its nearest seven competitors, which average 81.3% buys. Analysts don't like Arctic Cat as much as competitor Polaris Industries overall. Nine out of 10 analysts rate Polaris Industries a buy compared to three of five for Arctic Cat. Wall Street has warmed to the stock over the past three months, with analysts increasing their endorsement from hold to moderate buy.
  • Revenue Forecasts: On average, analysts predict $195.4 million in revenue this quarter. That would represent a rise of 11.2% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $1.08 per share. Estimates range from $0.98 to $1.15.

What our community says:
CAPS All-Stars are split on ACAT, with 52.4% rating it an "outperform" and 47.6% giving it an "underperform" rating. Fools are keen on Arctic Cat, though the message boards have been quiet lately with only 45 posts in the past 30 days. Arctic Cat's bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

The company raised its gross margin by 2.1 percentage points in the last quarter. Revenue rose 18.2% while cost of sales rose 15.2% to $60.7 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 Q1 Q4 Q3 Q2
Gross Margin 19.1% 9.2% 21.5% 29.2%
Operating Margin (4.8%) (19.8%) 8.0% 15.6%
Net Margin (3.1%) (13.0%) 6.1% 10.1%
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