The 10-second takeaway
For the quarter ended March 31 (Q1), Merge Healthcare missed estimates on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP loss per share contracted.
Gross margins contracted, operating margins dropped, net margins were steady.
Merge Healthcare reported revenue of $61.0 million. The five analysts polled by S&P Capital IQ wanted to see a top line of $64.7 million on the same basis. GAAP reported sales were 16% higher than the prior-year quarter's $52.7 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 $0.03. The five earnings estimates compiled by S&P Capital IQ anticipated $0.04 per share. GAAP EPS were -$0.02 for Q1 against -$0.04 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 62.1%, 70 basis points worse than the prior-year quarter. Operating margin was 9.9%, 130 basis points worse than the prior-year quarter. Net margin was -3.0%, about the same as the prior-year quarter.
Next quarter's average estimate for revenue is $68.0 million. On the bottom line, the average EPS estimate is $0.06.
Next year's average estimate for revenue is $281.1 million. The average EPS estimate is $0.29.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 104 members out of 123 rating the stock outperform, and 19 members rating it underperform. Among 29 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 25 give Merge Healthcare a green thumbs-up, and four give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Merge Healthcare is outperform, with an average price target of $8.38.
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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.