Microsemi (Nasdaq: MSCC) came in under analyst's estimates last quarter, but now have a chance to fix things this quarter. The company will unveil its latest earnings on Thursday, Nov. 10. Microsemi is a designer, manufacturer, and marketer of high performance analog and mixed-signal integrated circuits and high-reliability semiconductors.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Microsemi, with eight of nine rating it a buy and the remainder rating it a hold. Analysts like Microsemi better than competitor Semtech overall. While analysts still rate the stock a moderate buy, they are a little more optimistic about it compared to three months ago.
  • Revenue Forecasts: On average, analysts predict $226.4 million in revenue this quarter. That would represent a rise of 49.7% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.46 per share.

What our community says:
CAPS All-Stars are solidly behind the stock with 91.2% giving it an "outperform" rating. The community at large agrees with the All-Stars with 89% granting it a rating of "outperform." Fools are keen on Microsemi, though the message boards have been quiet lately with only 26 posts in the past 30 days. Despite the majority sentiment in favor of Microsemi, the stock has a middling CAPS rating of three out of five stars.

Management:
The company boosted its gross margin by 8.7 percentage points in the last quarter. Revenue rose 59.3% while cost of sales rose 32.5% to $93.1 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 57.0% 44.6% 51.5% 49.1%
Operating Margin 13.0% (4.0%) 3.4% 11.2%
Net Margin 14.1% (8.2%) (0.7%) 4.3%
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