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HMS Holdings (HMSY) to Report Q4 Earnings: What's in Store?

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HMS Holdings Corp.  fourth-quarter 2018 results are scheduled for release on Feb 22. The company’s solid focus on core business is likely to drive the results. This apart, its unique services like payment integrity, care management and consumer engagement appear promising.

Meanwhile, HMS Holdings continues to integrate the Eliza acquisition and innovate its emerging total population management or TPM business.

Q3 Results at a Glance

HMS Holdings reported adjusted earnings of 31 cents per share in the third quarter of 2018, which exceeded the Zacks Consensus Estimate of 21 cents. The bottom line also improved from 13 cents registered in the year-ago quarter.

Total revenues amounted to $154 million in the third quarter. The top-line figure surpassed the Zacks Consensus Estimate of $143 million.

Furthermore, the company has an average four-quarter positive earnings surprise of 33.7%.

Which Way are Q4 Estimates Trending?

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 25 cents, reflecting a 4.2% growth year over year. The same for revenues is pinned at $156.1 million, mirroring a 5.2% improvement year over year.

Let’s delve deeper.

HMS Holdings Corp Price and Consensus

TPM suite to Drive Q4

HMS Holdings’ TPM suite is likely to be the major growth driver in the fourth quarter. This is because the business is likely to gain from acquisitions and internal developments. In fact, management at HMS Holdings expects TPM to be the fastest-growing segment over the next several years as it is just in the early stages of cross-selling.

In the meantiume, HMS Holdings’ focus on consumer centric segment of healthcare delivery leveraged its core analytic capabilities, industry-leading data assets and client relationships.

Other Factors at Play

Positive Trends

Management at HMS Holdings expects fourth-quarter revenue to be flat or up slightly on a sequential basis. The company also expects margin expansion and bottom-line improvement in the to-be-reported quarter. Capital spending is also expected to pick up pace.

Acquisition of Eliza

Last year, HMS Holdings announced the acquisition of patient engagement specialist — Eliza Corporation. Eliza offers SaaS services to employers, providers, health plans, hospitals, pharmacies and clinics for medication adherence. Management expects Eliza growth to significantly boost fourth-quarter 2018 results.

What Does Our Model Say?

Our proven model clearly indicates that a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to deliver a positive earnings surprise. This is not the case here.

Earnings ESP: HMS Holdings has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: HMS Holdings currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Please note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks Worth a Look

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TG Therapeutics, Inc. (TGTX - Free Report) has an Earnings ESP of +0.55% and is a Zacks #1 Ranked player.

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