Patient investors will finally get a peek at updated financial reports for business software and services provider Sapient (NASDAQ:SAPE). It will report full-year 2006 results, quarterly information for last year's second and third quarters, and 2007's first-quarter results, on June 12. Brace yourselves, Fools; this company's dishing out a ton of information.

What analysts say:

  • Buy, sell, or waffle? Despite the accounting turmoil brought on by a stock-option backdating scandal, half of the company's 12 analysts rate Sapient a buy; four say "hold," and two say "sell."

  • Revenues. Undoubtedly, analysts' buoyant expectations stem partly from predictions that sales will grow 30% in the quarter, to $118.6 million.

  • Earnings. The profit picture is also expected to improve, as earnings should swing from a $0.01-per-share loss last year to a $0.02-per-share profit this time around.

What management says:
Rewriting a year's worth of financial statements after reviewing more than 60 million stock-option grants is a time-consuming and attention-sapping endeavor. The company has been providing preliminary numbers as it goes along, sometimes adding color, sometimes leaving investors grasping for a sense of how the different components function. Allan Herrick, the new CEO, has indicated that Sapient's "clients are responding well" to its services, and with preliminary reports showing that sales increased 37% in the prior quarter, it still seems to be in demand. We'll still need a full accounting, though, before we'll fall in line with the "buy" crowd.

What management does:
In addition to sapping management's energy, the stock-option review and statement revisions have sent operating costs soaring. For the preliminary fourth-quarter results, operating expenses jumped 45% over the year before. Now that the company seems to have finished all of its reviews, though, that should mean they numbers will return to historical levels. Business doesn't seem to have been hurt by the accounting mess, even if operations were disrupted.

Margin

12/05

03/06

06/06

09/06

12/06*

Gross

39.2%

38.1%

35.5%

34.3%

33.0%

Operating

8.9%

7.2%

5.0%

2.5%

0.3%

Net

7.7%

5.4%

6.6%

4.0%

0.8%
*Derived from press release; quarterly report not yet filed. All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
It's always tempting to jump on a stock that seems to have put its problems behind it, especially if it still exhibits a strong business. If that were the case with Sapient, I'd be more willing to join in -- but we simply don't know how its business has performed. In the past, it's had to revise its preliminary numbers downward, and until we see the current spate of reports the company intends to file, we won't know whether the revisions were any more accurate. While it seems that Sapient's ready to move forward with a still-sturdy business, I'd urge caution until all of the reports have been filed and thoroughly analyzed.

With Sapient's valuation still at a premium to Accenture (NYSE:ACN) and MPS Group (NYSE:MPS), it doesn't look as if the market has discounted the company's problems very much. The stock has almost doubled off last summer's lows. Still, until investors know exactly how the business unfolds, investing here amounts to gambling. Even if it means you haven't caught the bottom, it's still worth the wait.

Related Foolishness:

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Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.