What to Expect from Digital River

Digital River (Nasdaq: DRIV  ) is expected to report Q4 earnings on Feb. 6. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Digital River's revenues will drop -12.4% and EPS will decrease -37.8%.

The average estimate for revenue is $98.2 million. On the bottom line, the average EPS estimate is $0.28.

Revenue details
Last quarter, Digital River logged revenue of $91.7 million. GAAP reported sales were 3.9% lower than the prior-year quarter's $95.4 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Last quarter, non-GAAP EPS came in at $0.20. GAAP EPS were -$0.02 for Q3 against $0.15 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Recent performance
For the preceding quarter, gross margin was 82.1%, 150 basis points worse than the prior-year quarter. Operating margin was 1.4%, 360 basis points worse than the prior-year quarter. Net margin was -0.8%, 660 basis points worse than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $383.0 million. The average EPS estimate is $0.97.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 299 members out of 331 rating the stock outperform, and 32 members rating it underperform. Among 82 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 77 give Digital River a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Digital River is hold, with an average price target of $18.25.

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