The 10-second takeaway
For the quarter ended March 31 (Q1), HMS Holdings missed estimates on revenues and earnings per share.
Compared with the prior-year quarter, revenue improved significantly and GAAP earnings per share dropped significantly.
Margins dropped across the board.
HMS Holdings reported revenue of $107.3 million. The seven analysts polled by S&P Capital IQ looked for sales of $114.2 million on the same basis. GAAP reported sales were 30% higher than the prior-year quarter's $82.5 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.08. The four earnings estimates compiled by S&P Capital IQ predicted $0.13 per share. GAAP EPS of $0.08 for Q1 were 27% lower than the prior-year quarter's $0.11 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 41.2%, 320 basis points worse than the prior-year quarter. Operating margin was 14.9%, 460 basis points worse than the prior-year quarter. Net margin was 6.6%, 530 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $125.4 million. On the bottom line, the average EPS estimate is $0.16.
Next year's average estimate for revenue is $519.9 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 65 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 62 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 $34.50.
If you're interested in health-care stocks like HMS Holdings, you might want to expand your horizons to find maximum returns. Follow the money and meet a prime candidate for major returns in our new report, "Discover the Next Rule-Breaking Multibagger." Get instant access to this free report.
- Add HMS Holdings to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings. He is the 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 don't 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.