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Will Castlight Health (CSLT) Post a Surprise in Q3 Earnings?
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Castlight Health, Inc. (CSLT - Free Report) is set to report third-quarter 2016 results on Nov 2. Last quarter, the company posted a positive earnings surprise of 15.79%. Let us see how things are shaping up for this announcement.
Factors to Consider
Castlight Health operates as a provider of cloud-based software. It enables enterprises to gain control over their rapidly escalating health care costs.
The company reported encouraging second-quarter results. Revenues increased on a year-over-year basis and the reported loss also narrowed from the year-ago figure. Subscription revenues during the quarter came in at $22 million, up 27% on a year-over-year basis.
Castlight Health’s non-GAAP gross margin for the second quarter was 66.3%, up from 58.3% reported in the year-ago quarter. The year-over-year growth in gross margin was primarily due to a higher revenue base.
Furthermore, significant investments in growth areas for improving implementation timelines, particularly in case of upsell products, will boost profitability in the to-be reported quarter.
Our proven model does not conclusively show that Castlight Health is likely to beat the Zacks Consensus Estimate in its upcoming release. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.
Zacks ESP:The Earnings ESP for Castlight Health is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 14 cents per share. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Castlight Health has a Zacks Rank #3. Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a couple of stocks, which you may consider as our model shows that they have the right combination of elements to post an earnings beat in their upcoming releases:
Methanex Corporation (MEOH - Free Report) with Earnings ESP of +600.00% and a Zacks Rank #3
Freshpet, Inc. (FRPT - Free Report) with an Earnings ESP of +100.0% and a Zacks Rank #3
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Will Castlight Health (CSLT) Post a Surprise in Q3 Earnings?
Castlight Health, Inc. (CSLT - Free Report) is set to report third-quarter 2016 results on Nov 2. Last quarter, the company posted a positive earnings surprise of 15.79%. Let us see how things are shaping up for this announcement.
Factors to Consider
Castlight Health operates as a provider of cloud-based software. It enables enterprises to gain control over their rapidly escalating health care costs.
The company reported encouraging second-quarter results. Revenues increased on a year-over-year basis and the reported loss also narrowed from the year-ago figure. Subscription revenues during the quarter came in at $22 million, up 27% on a year-over-year basis.
Castlight Health’s non-GAAP gross margin for the second quarter was 66.3%, up from 58.3% reported in the year-ago quarter. The year-over-year growth in gross margin was primarily due to a higher revenue base.
Furthermore, significant investments in growth areas for improving implementation timelines, particularly in case of upsell products, will boost profitability in the to-be reported quarter.
CASTLIGHT HLTH Price and EPS Surprise
CASTLIGHT HLTH Price and EPS Surprise | CASTLIGHT HLTH Quote
Earnings Whispers
Our proven model does not conclusively show that Castlight Health is likely to beat the Zacks Consensus Estimate in its upcoming release. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.
Zacks ESP:The Earnings ESP for Castlight Health is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 14 cents per share. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Castlight Health has a Zacks Rank #3. Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a couple of stocks, which you may consider as our model shows that they have the right combination of elements to post an earnings beat in their upcoming releases:
Methanex Corporation (MEOH - Free Report) with Earnings ESP of +600.00% and a Zacks Rank #3
Carmike Cinemas Inc. with Earnings ESP of +166.67% and a Zacks Rank #3 You can see the complete list of today’s Zacks #1 Rank stocks here
Freshpet, Inc. (FRPT - Free Report) with an Earnings ESP of +100.0% and a Zacks Rank #3
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>