A month has gone by since the last earnings report for Medidata Solutions . Shares have added about 3.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Medidata due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Recent Earnings
Medidata reported second-quarter 2018 adjusted earnings per share of 43 cents, beating the Zacks Consensus Estimate by 13.2%. Earnings improved 43.3% from the year-ago quarter.
The company reported revenues of$155.9 million, up 14.6% on a year-over-year basis. However, revenues marginally lagged the Zacks Consensus Estimate of $156 million.
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.
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 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 projectedbetween $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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. In the past month, the consensus estimate has shifted -14.29% due to these changes.
VGM Scores
At this time, Medidata has a nice Growth Score of B, though it is lagging a bit on the momentum front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than momentum investors.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, Medidata has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Medidata (MDSO) Up 3.9% Since Last Earnings Report?
A month has gone by since the last earnings report for Medidata Solutions . Shares have added about 3.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Medidata due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Recent Earnings
Medidata reported second-quarter 2018 adjusted earnings per share of 43 cents, beating the Zacks Consensus Estimate by 13.2%. Earnings improved 43.3% from the year-ago quarter.
The company reported revenues of$155.9 million, up 14.6% on a year-over-year basis. However, revenues marginally lagged the Zacks Consensus Estimate of $156 million.
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.
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 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 projectedbetween $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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. In the past month, the consensus estimate has shifted -14.29% due to these changes.
VGM Scores
At this time, Medidata has a nice Growth Score of B, though it is lagging a bit on the momentum front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than momentum investors.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, Medidata has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.