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Castlight (CSLT) to Report Q4 Earnings: What's in the Cards?

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Castlight Health, Inc. (CSLT - Free Report) is slated to report fourth-quarter 2018 results on Feb 28.

Notably, the company has beaten the Zacks Consensus Estimate in the two of the trailing four quarters, recording average positive surprise of 31.3%.

The company reported break-even third-quarter earnings per share versus the Zacks Consensus Estimate of a loss of 3 cents. This compares with loss of 5 cents per share a year ago.

Revenues surged 15.8% year over year to $40 million and surpassed the Zacks Consensus Estimate by 4.4%.

What to Expect?

The Zacks Consensus Estimate for revenues in the quarter under review is pegged at $40.6 million, up 9.7% year over year. While the Zacks Consensus Estimate for earnings are pegged at 1 cent per share, representing year-over-year growth of 125%.

Let’s see how things are shaping up for the upcoming announcement.

Factors at Play

Castlight’s software platform that assists organizations in gaining control over their health care costs is witnessing rapid adoption. This was evident from top-line growth. Moreover, the company expects renewals to boost annualized recurring revenues (“ARR”).

On a pro forma basis, ARR came in at $152.7 million in the last reported quarter, rising 6% year over year. This can primarily be attributed to cross selling of wellbeing clients into legacy care guidance and adoption of the company’s new platforms. Cross-selling of products is also expanding customer base.

Moreover, partnerships with the likes of Anthem, Livongo, Big Health, Hinge Health, Retrofit and Kurbo are likely to help the company rapidly penetrate a number of health markets. Additionally, integration of Castlight's comprehensive health navigation platform with Washington Health Alliance will expand customer base.

Further, the launch of Castlight Complete product the company will be able to provide virtually any organization in the United States with the most ample health navigation solution in the market.

In the last reported quarter, Subscription revenues (92% of total revenues) increased 17% to $36.7 million. Professional Services & other (8% of total revenues) soared 7%year over year to almost $3.3 million.

We believe all these factors are likely to aid the company’s fourth-quarter results.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Meanwhile, the Sell-rated stocks (Zacks Rank #4 or #5) are best avoided.

Castlight has a Zacks Rank #2 and has Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With Favorable Combination

Here are some companies, which, per our model, have the right combination of elements to beat estimates in their upcoming releases.

Live Nation Entertainment, Inc (LYV - Free Report) has an Earnings ESP of +2.41% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Foot Locker, Inc. (FL - Free Report) has Earnings ESP of +1.26% and a Zacks Rank #2.

AMC Entertainment Holdings, Inc (AMC - Free Report) has Earnings ESP of +37.68% and a Zacks Rank #3.

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