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What Does Wall Street See for NetSuite's Q3?

By Seth Jayson - Updated Apr 7, 2017 at 12:15PM

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Checking expectations

NetSuite (NYSE: N) is expected to report Q3 earnings on Oct. 25. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict NetSuite's revenues will increase 28.0% and EPS will drop 0.0%.

The average estimate for revenue is $78.0 million. On the bottom line, the average EPS estimate is $0.05.

Revenue details
Last quarter, NetSuite booked revenue of $74.7 million. GAAP reported sales were 29% higher than the prior-year quarter's $57.8 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Last quarter, non-GAAP EPS came in at $0.06. GAAP EPS were -$0.14 for Q2 compared to -$0.15 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Recent performance
For the preceding quarter, gross margin was 69.7%, 10 basis points worse than the prior-year quarter. Operating margin was -10.6%, 560 basis points better than the prior-year quarter. Net margin was -13.3%, 360 basis points better than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $304.0 million. The average EPS estimate is $0.22.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 230 members out of 319 rating the stock outperform, and 89 members rating it underperform. Among 84 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 53 give NetSuite a green thumbs-up, and 31 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on NetSuite is hold, with an average price target of $44.18.

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