Coinstar Earnings Preview

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Coinstar (NAS: CSTR) will try to beat its earnings estimates for the fifth consecutive quarter. The company will unveil its latest earnings on Thursday. Coinstar is a multinational company that offers a range of solutions for retailers' storefronts including self-service coin counting, entertainment services, self-service DVD kiosks, money transfer services, and electronic payment services.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Coinstar, with nine of 15 rating it a buy and the remainder rating it a hold. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $461.8 million in revenue this quarter. That would represent a rise of 21.5% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.88 per share. Estimates range from $0.83 to $0.95.

What our community says:
CAPS All-Stars are solidly backing the stock with 88.4% granting it an outperform rating. The community at large concurs with the All-Stars with 87.6% assigning it a rating of outperform. Fools are gung-ho about Coinstar and haven't been shy with their opinions lately, logging 330 posts in the past 30 days. Despite the majority sentiment in favor of Coinstar, the stock has a middling CAPS rating of three out of five stars.

Management:
Coinstar's profit has risen year over year by an average of 81.8% over the past five quarters. The company boosted its gross margin by 3.4 percentage points in the last quarter. Revenue rose 27.1% while cost of sales rose 21% to $292.5 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

32.8%

25.7%

28.7%

32.8%

Operating Margin

13.4%

7.4%

11.0%

12.1%

Net Margin

6.1%

2.0%

3.0%

5.1%

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Motley Fool newsletter services have recommended buying shares of Coinstar.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

At the time this article was published

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