The 10-second takeaway
For the quarter ended March 31 (Q1), DepoMed crushed expectations on revenues and exceeded expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped significantly and GAAP earnings per share contracted to a loss.
Margins dropped across the board.
DepoMed tallied revenue of $16.8 million. The five analysts polled by S&P Capital IQ predicted revenue of $12.7 million on the same basis. GAAP reported sales were 80% lower than the prior-year quarter's $83.1 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 -$0.16. The five earnings estimates compiled by S&P Capital IQ forecast -$0.24 per share. GAAP EPS were -$0.16 for Q1 versus $1.77 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 96.9%, 110 basis points worse than the prior-year quarter. Operating margin was -53.1%, 12,390 basis points worse than the prior-year quarter. Net margin was -52.3%, 17,120 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $14.5 million. On the bottom line, the average EPS estimate is -$0.23.
Next year's average estimate for revenue is $66.2 million. The average EPS estimate is -$0.79.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 236 members out of 252 rating the stock outperform, and 16 members rating it underperform. Among 47 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 45 give DepoMed 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 DepoMed is buy, with an average price target of $9.10.
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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.