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What Does Wall Street See for Shanda Games's Q1?

By Seth Jayson – Updated Apr 10, 2017 at 1:15PM

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Checking expectations

Shanda Games (Nasdaq: GAME) is expected to report Q1 earnings on May 23. 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 Shanda Games's revenues will contract -21.7% and EPS will shrink -27.3%.

The average estimate for revenue is $172.8 million. On the bottom line, the average EPS estimate is $0.16.

Revenue details
Last quarter, Shanda Games reported revenue of $172.1 million. GAAP reported sales were 19% lower than the prior-year quarter's $215.1 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 $0.15. GAAP EPS of $0.12 for Q4 were 29% lower than the prior-year quarter's $0.17 per share.

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 65.4%, 390 basis points better than the prior-year quarter. Operating margin was 29.8%, 210 basis points worse than the prior-year quarter. Net margin was 19.8%, 260 basis points worse than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $743.0 million. The average EPS estimate is $0.69.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 300 members out of 311 rating the stock outperform, and 11 members rating it underperform. Among 38 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 31 give Shanda Games a green thumbs-up, and seven give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Shanda Games is outperform, with an average price target of $4.38.

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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. The Motley Fool has no position in any of the stocks mentioned. 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.

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