The 10-second takeaway
For the quarter ended Dec. 31 (Q4), HMS Holdings met expectations on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue improved and GAAP earnings per share shrank.
Gross margin expanded, operating margin expanded, and net margin dropped.
HMS Holdings chalked up revenue of $99.7 million. The seven analysts polled by S&P Capital IQ hoped for sales of $99.0 million on the same basis. GAAP reported sales were 14% higher than the prior-year quarter's $87.2 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 $0.18. The six earnings estimates compiled by S&P Capital IQ anticipated $0.16 per share on the same basis. GAAP EPS of $0.13 for Q4 were 7.1% lower than the prior-year quarter's $0.14 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 49.3%, 120 basis points better than the prior-year quarter. Operating margin was 25.0%, 140 basis points better than the prior-year quarter. Net margin was 11.2%, 300 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $114.5 million. On the bottom line, the average EPS estimate is $0.13.
Next year's average estimate for revenue is $520.4 million. The average EPS estimate is $0.78.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 279 members out of 296 rating the stock outperform, and 17 members rating it underperform. Among 71 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 68 give HMS Holdings a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on HMS Holdings is outperform, with an average price target of $31.29.
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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.