Model N, Inc. (NYSE:MODN) is scheduled to report Q4 earnings results on November 10, 2020.
The company is expected to report earnings of $0.09/share on revenue of $40.505 million. The consensus earnings per share (EPS) of $0.09/share is based on a poll of 9 analysts and represents a decline in eps of −23.8% over the same quarter last year, when the company reported earnings of $0.12/share.
The revenue forecast of $40.505 million based on a poll of 8 analysts implies a year-over-year (YoY) growth in revenue of 10.7%. Last year the company reported $36.603 million in revenue for the quarter.
| Metric | Expected | Prior Year | YoY Change |
|---|---|---|---|
| Revenue | $40.51 | $36.60 | 10.7% |
| EPS | $0.09 | $0.12 | −23.8% |
Earnings Call Trends
Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.
What are your expectations from Model N, Inc. for earnings this quarter? Let us know in the comments!
| Quarter | Expected | Reported | Surprise | Result |
|---|---|---|---|---|
| Q3, 2020 | $0.06 | $0.15 | 135.8% | Beat |
| Q2, 2020 | $0.02 | $0.07 | 227.3% | Beat |
| Q1, 2020 | $0.06 | $0.12 | 95.3% | Beat |
| Q4, 2019 | $0.08 | $0.12 | 52.7% | Beat |
| Q3, 2019 | $0.01 | $0.06 | 326.1% | Beat |
| Q2, 2019 | -$0.02 | $0.01 | 142.1% | Beat |
| Q1, 2019 | $0.01 | $0.03 | 385.4% | Beat |
| Q4, 2018 | -$0.02 | $0.06 | 450.1% | Beat |
In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −1.4%.
| Report Date | Price Day Prior | Price Next Day | Change % | Result |
|---|---|---|---|---|
| August 4, 2020 | $40.71 | $40.13 | −1.4% | Decline |
| May 5, 2020 | $27.54 | $32.09 | 16.5% | Increase |
| February 4, 2020 | $31.05 | $31.42 | 1.2% | Increase |
| November 5, 2019 | $29.58 | $29.54 | −0.1% | Decline |
The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.91, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.91 implies a 0.2% chance of earnings manipulation.
Fundamentals And Technical Analysis
Model N, Inc. is currently trading at $36.68/share, up 3.1% for the day. The company is trading at approximately 83.5% of its 52-week high of $44.56/share. The company’s stock price is down −8.6% since the last earnings report and up 2.8% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 48.52 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.
The current share price implies a price-to-earnings (P/E) multiple of −81.30 and a forward P/E multiple of 82.03.
Model N, Inc.’s current share price also implies a price-to-book (P/B) multiple of 10.53. The following table summarizes some other key fundamental ratios:
| Metric | Value |
|---|---|
| Last Reported Fiscal Period Key | FY2020.Q3 |
| Period End Date | June 30, 2020 |
| Stock Price (Current) | $36.68 |
| P/E Ratio | −81.3x |
| P/E Ratio (Fwd) | 82.0x |
| PEG Ratio | −5.7 |
| Total Debt / Total Capital | 8.7% |
| Levered Free Cash Flow | $12.628 million |
| EV / EBITDA | −191.0x |
Model N, Inc. is a small-cap stock with a market capitalization of $1.23 billion and a total enterprise value of $1.154 billion. The company operates in the Information Technology sector and the Software industry.
Model N, Inc. provides revenue management cloud solutions for the life sciences and technology companies. The company’s cloud-based revenue management solutions include Revenue Cloud for Pharma, Revenue Cloud for Med Tech, Revenue Cloud for High-Tech Manufacturing, and Revenue Cloud for Semiconductors and Components. It develops software applications, such as managed care and government pricing for life science companies; and channel incentives for technology companies. The company also offers revenue management processes, such as pricing, quoting, contracting, rebates, incentives, channel management, and regulatory compliance. In addition, Model N, Inc. provides implementation, managed, strategic, and customer support services. It primarily serves large and mid-sized organizations worldwide through its direct sales force. Model N, Inc. was founded in 1999 and is headquartered in San Mateo, California, with additional offices in the United States, India, and Switzerland.
