Shuffle Master Earnings Preview

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Shuffle Master (NAS: SHFL) met its estimates last quarter, but investors hope that it will beat them this quarter. The company will unveil its latest earnings Wednesday. Shuffle Master provides casino and other gaming customers with products and services that enhance their gaming floors by improving profitability, productivity, and security, as well as offering popular cutting-edge gaming entertainment content and technology.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Shuffle Master, with four of seven rating it a buy and the remainder rating it a hold. Analysts don't like Shuffle Master as much as competitor Multimedia Games overall. While analysts still rate the stock a moderate buy, they are a little more optimistic about it compared with three months ago.
  • Revenue Forecasts: On average, analysts predict $58.1 million in revenue this quarter. That would represent a rise of 12.8% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.15 per share. Estimates range from $0.14 to $0.17.

What our community says:
CAPS All-Stars are solidly backing the stock with 82.2% giving it an "outperform" rating. The community at large concurs with the All-Stars with 83.8% awarding it a rating of "outperform." Fools have embraced Shuffle Master and haven't been shy with their opinions lately, logging 240 posts in the past 30 days. Shuffle Master's bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
Shuffle Master's profit has risen year over year by an average of 6.6% over the past five quarters. Revenue has now gone up for three straight quarters. The company's gross margin shrank by 3.3 percentage points in the last quarter. Revenue rose 17.8% while cost of sales rose 28.5% to $23.8 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

60.3%

66.6%

60.0%

61.4%

Operating Margin

20.3%

16.1%

17.1%

16.4%

Net Margin

13.3%

11.0%

9.7%

11.3%

One final thing: If you want to keep tabs on Shuffle Master movements, and for more analysis on the company, make sure you add it to your watchlist.

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At the time this article was published

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