NutriSystem Earnings Preview

While NutriSystem (Nasdaq: NTRI) missed estimates last quarter, investors hope that it will bounce back and outpace Wall Street expectations this quarter. The company will unveil its latest earnings on Monday, Feb. 20. NutriSystem is a provider of a weight management system based on a portion-controlled, prepared meal program.

What analysts say:

• Buy, sell, or hold?: Analysts strongly back NutriSystem, with three out of five rating it a buy and the remainder rating it a hold. Analysts like NutriSystem better than competitor Weight Watchers International overall. Analysts' rating of NutriSystem has stayed constant from three months prior.
• Revenue forecasts: On average, analysts predict $64.4 million in revenue this quarter. That would represent a decline of 26.7% from the year-ago quarter.
• Wall Street earnings expectations: The average analyst estimate is a loss of $0.03 per share. Estimates range from a loss of $0.05 to breaking even.

What our community says:
CAPS All-Stars are in strong support of the stock, with 91.6% assigning it an outperform rating. The community at large is in line with the All-Stars, with 90.1% giving it a rating of outperform. Fools are impressed with NutriSystem and haven't been shy with their opinions lately, logging 500 posts in the past 30 days. Despite the majority sentiment in favor of NutriSystem, the stock has a middling CAPS rating of three out of five stars.

Management:
Revenue has fallen for the past three quarters. The company's gross margin shrank by 4.7 percentage points in the last quarter. Revenue fell 29.3% while cost of sales fell 21.6% to $41.3 million from a year earlier.

Now, a look at how efficient management has been at running the business. Traditionally, margins serve as an illustration of how efficiently a company captures portions of sales dollars. NutriSystem's gross margins have decreased year over year for the last three quarters. Gross margins reflect the total sales revenue retained after costs. Here are NutriSystem's reported margins for the last four quarters:

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Earnings estimates provided by Zacks.