The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Epocrates beat expectations on revenues and exceeded expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank slightly and GAAP earnings per share contracted to a loss.
Margins dropped across the board.
Epocrates booked revenue of $29.7 million. The five analysts polled by S&P Capital IQ predicted a top line of $28.1 million on the same basis. GAAP reported sales were 1.9% lower than the prior-year quarter's $30.3 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.05. The five earnings estimates compiled by S&P Capital IQ predicted $0 per share on the same basis. GAAP EPS were -$0.27 for Q4 versus $0.18 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 60.6%, 1,170 basis points worse than the prior-year quarter. Operating margin was -6.5%, 1,900 basis points worse than the prior-year quarter. Net margin was -22.0%, 3,080 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $28.7 million. On the bottom line, the average EPS estimate is $0.03.
Next year's average estimate for revenue is $119.0 million. The average EPS estimate is $0.22.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 34 members out of 38 rating the stock outperform, and four members rating it underperform. Among 10 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), eight give Epocrates a green thumbs-up, and two give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Epocrates is hold, with an average price target of $12.50.
Over the decades, small-cap stocks like Epocrates have produced market-beating returns, provided they're value-priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: 2 Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.
- Add Epocrates to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.