The 10-second takeaway
For the quarter ended June 30 (Q2), HMS Holdings beat slightly on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share contracted. GAAP earnings per share shrank significantly.
Margins dropped across the board.
HMS Holdings recorded revenue of $125.8 million. The nine analysts polled by S&P Capital IQ looked for a top line of $123.7 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 $0.20. The 10 earnings estimates compiled by S&P Capital IQ forecast $0.21 per share. Non-GAAP EPS of $0.20 for Q2 were 13% lower than the prior-year quarter's $0.23 per share. GAAP EPS of $0.12 for Q2 were 20% lower than the prior-year quarter's $0.15 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 36.5%, 400 basis points worse than the prior-year quarter. Operating margin was 16.2%, 510 basis points worse than the prior-year quarter. Net margin was 8.3%, 250 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $127.2 million. On the bottom line, the average EPS estimate is $0.23.
Next year's average estimate for revenue is $504.9 million. The average EPS estimate is $0.88.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 281 members out of 296 rating the stock outperform, and 15 members rating it underperform. Among 64 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 60 give HMS Holdings a green thumbs-up, and four give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on HMS Holdings is outperform, with an average price target of $28.67.
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