Image source: Medidata Solutions.

What: After reporting a revenue miss on the top line, a beat on the bottom line, and light guidance for 2016, shares in Medidata Solutions (NASDAQ:MDSO) tumbled by 12% at 11:00 a.m. ET today.

So what: On Wednesday, the healthcare data management solutions company reported that its fourth-quarter sales grew 10.8% year over year to $98.87 million and earnings per share grew 13% to $0.27. Industry watchers were expecting sales and EPS of $105.08 million and $0.24, respectively.

In the quarter, revenue was negatively affected by a "customer-driven contract modification" that had pulled some sales forward into the third quarter.

Medidata Solutions' management also reported full-year sales of $392.5 million, up 17% from 2014, and a 27% increase in full-year EPS to $0.90.

In 2015, revenue growth was driven by a 52% increase in new clients, including 59 new clients that were added last quarter. Overall, the company finished the year with 611 customers, up 26% from 2014.

Now what: Since the top line endured a one-time headwind associated with the contract modification, investors may want to give management a mulligan for its revenue miss last quarter and focus instead on 2016.

This year, the company expects to generate revenue between $450 million and $474 million, up 21% from last year, and non-GAAP adjusted net income of between $54.5 million and $59 million, up from $50.8 million in 2015. Using its guidance for 57.3 million diluted shares this year, that adjusted net income forecast works out to adjusted EPS of between $0.95 and $1.03.

That guidance is conservative relative to industry watchers' expectations for sales of $474 million and EPS of $1.08, but it's still solid growth that reflects the industry's ongoing embrace of data to improve trial design and steer drug development.

Image source: Medidata Solutions.

Since Medidata Solutions has overdelivered on earnings in each of the past four quarters, it's possible that management's outlook for this year is "light" by design. After all, when it comes to earnings, it's always better to underpromise but overdeliver.

Overall, a push toward personalized medicine and a desire to improve clinical trial win rates should continue to drive customer growth and that suggests that investors may want to consider picking up Medidata Solutions shares on this dip.  

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