We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Medidata (MDSO) Q2 Earnings Beat, Revenues Miss Estimates
Read MoreHide Full Article
Medidata Solutions, Inc. recently reported second-quarter 2018 adjusted earnings per share of 43 cents, beating the Zacks Consensus Estimate by 13.2%. Earnings also improved 43.3% from the year-ago quarter.
The New York-based global life sciences technology provider reported revenues worth $155.9 million, up 14.6% on a year-over-year basis. However, revenues marginally lagged the Zacks Consensus Estimate of $156 million.
Meanwhile, in the past six months, shares of Medidata have rallied 5.4%, edging past the industry’s rise of 2.5%.
The stock carries a Zacks Rank #5 (Strong Sell).
Segment Details
Subscription revenues came in at $130.5 million, up 15.6% on a year-over-year basis. Per management, revenues in the segment increased 17% in the first half of 2018. In fact, the company expects revenues in the segment to accelerate in the second half of 2018.
Revenues from Professional services grossed $25.4 million, up 9.9% from the prior-year quarter.
Medidata Solutions, Inc. Price, Consensus and EPS Surprise
In the second quarter, gross profit came in at $118.4 million, up 13.7% year over year. Though gross margin was an impressive 90.7%, it contracted 150 basis points (bps).
Operating income totaled $12.8 million, up 1.4% on a year-over-year basis. Adjusted operating margin was 9.8%, down 140 bps.
Guidance
Medidata has kept its total revenue guidance for 2018 unchanged. The company expects professional services to contribute more than $95 million in 2018. Non-GAAP operating income is expected between $146 million and $154 million.
Management further expects gross margin to remain compressed for 2018 owing to the SHYFT acquisition. However, management expects $5-$6 million contribution from SHYFT in 2018.
Our Take
Medidata wrapped up the second quarter on a tepid note. However, solid year-over-year rise in earnings raises optimism. Strong subscription revenues are a positive. The company’s focus on cloud-based services is worth a mention. In the quarter, Medidata delivered its first ever Synthetic Control Database to a high-profile sponsor. The company currently rides on the recently acquired SHYFT, from which it expects considerable contribution in 2018. The recent collaboration with Novartis is likely to support the commercialization of key therapies in Europe. Furthermore, the company’s flagship RAVE genomics platform is currently experiencing robust demand from top pharmacies.
On the flip side, declining gross and operating margins raises concern. Medidata’s acquisition spree poses significant consolidation risks for the company. Stiff competition in the niche space adds to the woes.
Key Picks
A few better-ranked stocks in the broader medical space are Masimo Corporation (MASI - Free Report) , Align Technology, Inc. (ALGN - Free Report) and Integer Holdings Corp (ITGR - Free Report) .
Align Technology is expected to release second-quarter 2018 results on Jul 25. The Zacks Consensus Estimate for adjusted earnings per share is $1.09 and the same for revenues is $469.2 million. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Integer Holdings is slated to release second-quarter 2018 results on Aug 2. The Zacks Consensus Estimate for adjusted bottom line is 90 cents and the same for the top line is pinned at $381.8 million. The stock sports a Zacks Rank #1.
Masimo is scheduled to release its second-quarter 2018 results on Aug 1. The Zacks Consensus Estimate for adjusted earnings per share stands at 72 cents, while the same for revenues is pinned at $208 million. The stock carries Zacks Rank #2 (Buy).
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Medidata (MDSO) Q2 Earnings Beat, Revenues Miss Estimates
Medidata Solutions, Inc. recently reported second-quarter 2018 adjusted earnings per share of 43 cents, beating the Zacks Consensus Estimate by 13.2%. Earnings also improved 43.3% from the year-ago quarter.
The New York-based global life sciences technology provider reported revenues worth $155.9 million, up 14.6% on a year-over-year basis. However, revenues marginally lagged the Zacks Consensus Estimate of $156 million.
Meanwhile, in the past six months, shares of Medidata have rallied 5.4%, edging past the industry’s rise of 2.5%.
The stock carries a Zacks Rank #5 (Strong Sell).
Segment Details
Subscription revenues came in at $130.5 million, up 15.6% on a year-over-year basis. Per management, revenues in the segment increased 17% in the first half of 2018. In fact, the company expects revenues in the segment to accelerate in the second half of 2018.
Revenues from Professional services grossed $25.4 million, up 9.9% from the prior-year quarter.
Medidata Solutions, Inc. Price, Consensus and EPS Surprise
Medidata Solutions, Inc. Price, Consensus and EPS Surprise | Medidata Solutions, Inc. Quote
Margins
In the second quarter, gross profit came in at $118.4 million, up 13.7% year over year. Though gross margin was an impressive 90.7%, it contracted 150 basis points (bps).
Operating income totaled $12.8 million, up 1.4% on a year-over-year basis. Adjusted operating margin was 9.8%, down 140 bps.
Guidance
Medidata has kept its total revenue guidance for 2018 unchanged. The company expects professional services to contribute more than $95 million in 2018. Non-GAAP operating income is expected between $146 million and $154 million.
Management further expects gross margin to remain compressed for 2018 owing to the SHYFT acquisition. However, management expects $5-$6 million contribution from SHYFT in 2018.
Our Take
Medidata wrapped up the second quarter on a tepid note. However, solid year-over-year rise in earnings raises optimism. Strong subscription revenues are a positive. The company’s focus on cloud-based services is worth a mention. In the quarter, Medidata delivered its first ever Synthetic Control Database to a high-profile sponsor. The company currently rides on the recently acquired SHYFT, from which it expects considerable contribution in 2018. The recent collaboration with Novartis is likely to support the commercialization of key therapies in Europe. Furthermore, the company’s flagship RAVE genomics platform is currently experiencing robust demand from top pharmacies.
On the flip side, declining gross and operating margins raises concern. Medidata’s acquisition spree poses significant consolidation risks for the company. Stiff competition in the niche space adds to the woes.
Key Picks
A few better-ranked stocks in the broader medical space are Masimo Corporation (MASI - Free Report) , Align Technology, Inc. (ALGN - Free Report) and Integer Holdings Corp (ITGR - Free Report) .
Align Technology is expected to release second-quarter 2018 results on Jul 25. The Zacks Consensus Estimate for adjusted earnings per share is $1.09 and the same for revenues is $469.2 million. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Integer Holdings is slated to release second-quarter 2018 results on Aug 2. The Zacks Consensus Estimate for adjusted bottom line is 90 cents and the same for the top line is pinned at $381.8 million. The stock sports a Zacks Rank #1.
Masimo is scheduled to release its second-quarter 2018 results on Aug 1. The Zacks Consensus Estimate for adjusted earnings per share stands at 72 cents, while the same for revenues is pinned at $208 million. The stock carries Zacks Rank #2 (Buy).
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>