The 10-second takeaway
For the quarter ended March 31 (Q4), Quality Systems missed estimates on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue grew slightly. Non-GAAP earnings per share shrank significantly. GAAP earnings per share dropped to a loss.
Margins shrank across the board.
Quality Systems notched revenue of $111.3 million. The 18 analysts polled by S&P Capital IQ predicted sales of $117.6 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.
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 $0.21. The 15 earnings estimates compiled by S&P Capital IQ predicted $0.28 per share. Non-GAAP EPS of $0.21 for Q4 were 16% lower than the prior-year quarter's $0.25 per share. GAAP EPS were -$0.07 for Q4 versus $0.25 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 56.6%, 490 basis points worse than the prior-year quarter. Operating margin was 13.7%, 770 basis points worse than the prior-year quarter. Net margin was -3.7%, much worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $121.0 million. On the bottom line, the average EPS estimate is $0.27.
Next year's average estimate for revenue is $498.2 million. The average EPS estimate is $1.18.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 2,116 members out of 2,183 rating the stock outperform, and 67 members rating it underperform. Among 654 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 639 give Quality Systems a green thumbs-up, and 15 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Quality Systems is hold, with an average price target of $17.77.
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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 recommends Quality Systems. 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.
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