Mentor Graphics Earnings Preview

Motley Fool Staff
Updated

Watch Mentor Graphics' (NAS: MENT) earnings report to see if it can beat analyst expectations for the fourth consecutive quarter. The company will unveil its latest earnings on Thursday, August 18. Mentor Graphics supplies electronic design automation systems, advanced computer software, and emulation systems used to automate the design, analysis, and testing of electronic hardware and embedded systems software in electronic systems and components.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Mentor Graphics, with four of six rating it a buy and the remainder rating it a hold. Analysts like Mentor Graphics better than competitor Tessera Technologies overall. While analysts still rate the stock a moderate buy, they are a little more optimistic about it compared to three months ago.

  • Revenue Forecasts: On average, analysts predict $210 million in revenue this quarter. That would represent a rise of 11.7% from the year-ago quarter.

  • Wall Street Earnings Expectations: The average analyst estimate is a loss of $0.07 per share. Estimates range from a loss of $0.10 to a loss of $0.05.

What our community says:
CAPS All Stars are solidly behind the stock, with 79.2% assigning it an "outperform" rating. The community at large concurs with the All Stars, with 78.1% giving it a rating of "outperform." Fools are bullish on Mentor Graphics, though the message boards have been quiet lately with only 45 posts in the past 30 days. Mentor Graphics has a bullish CAPS rating of four out of five stars that is about on par with the Fool community assessment.

Management:
Revenue has now gone up for three straight quarters.

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

Q1

Q4

Q3

Q2

Gross Margin

82.4%

86.9%

83.7%

83.2%

Operating Margin

7.0%

18.7%

8.6%

(5.6%)

Net Margin

(1.0%)

16.5%

6.4%

(7.6%)

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At the time thisarticle was published

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