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What: Shares of Vocera Communications (NYSE:VCRA), a mobile communication solutions provider, dipped as much as 17% following the release of its fourth-quarter results and first-quarter forecast, and receiving an analyst downgrade.
So what: For the quarter, Vocera reported a 24% increase in revenue to $27 million as non-GAAP adjusted EBITDA more than doubled and EPS came in at $0.10 -- $0.03 above the Street's expectations. What crushed Vocera was its first-quarter guidance of $23 million to $25 million in revenue on breakeven earnings to a loss of $0.05. Wall Street was expecting $28.2 million in revenue and a profit of $0.08 for the upcoming quarter. In response to these results, research firm Sidoti downgraded Vocera to neutral from buy.
Now what: Despite Vocera's management team appearing confident that the company is heading in the correct direction, and management boosting its long-term margin target to 70%, it's a bit hard to understand why Vocera's guidance fell so short of Wall Street's estimates. Vocera's full-year guidance was in line with estimates, so perhaps it deserves a pass on the upcoming quarter, but the situation bears watching.
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