Castlight (CSLT) To Report Q4 Earnings:What's In The Cards?

Castlight Health, Inc. (NYSE:CSLT) is set to report fourth-quarter 2017 results on Feb 21.

Notably, the company has beaten the Zacks Consensus Estimate is the trailing four quarters, with an average positive surprise of 40.54%. Last quarter, the company came up with a positive surprise of 28.57%.

Loss of 5 cents per share was in line with the year-ago quarter figure. Revenues increased 35.6% year over year to $34.6 million and also surpassed the Zacks Consensus Estimate of $34 million. Castlight stated that increasing rate of adoption, broadening product portfolio and operating efficiencies were the key catalysts.

Factors to Consider

Castlight’s software platform that assists organizations in gaining control over their health care costs is witnessing rapid adoption. This was evident from the top-line growth. Moreover, Castlight expects renewals to boost its annualized recurring revenues (“ARR”).

The Zacks Consensus Estimate for Professional Services segment revenues is around $3.2 million while that for Subscription revenues is about $33.1 million.

The company’s strategic acquisition of Jiff has strengthened its product portfolio. Cross-selling of products is also expanding customer base.

Moreover, partnerships with the likes of Livongo, Big Health, Hinge Health, Retrofit and Kurbo are likely to help the company rapidly penetrate a number of health markets. Additionally, integration of Castlight's comprehensive health navigation platform with Washington Health Alliance will expand customer base.

We believe all these factors to be key catalysts for the company’s fourth-quarter results. The Zacks Consensus Estimate for revenues and earnings are $36 million and negative 4 cents per share, respectively.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Castlight has a Zacks Rank #3 and an Earnings ESP of +7.69%. Consequently, our proven model shows that the company is likely to deliver a positive surprise this quarter.

Other Stocks to Consider

Here are some other top-ranked stocks that you may want to consider as our model shows that these too have the right combination of elements to deliver an earnings beat in their upcoming release.

Micron Technology (NASDAQ:MU) has an Earnings ESP of +1.83% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Analog Devices (NASDAQ:ADI) has an Earnings ESP of +0.96% and a Zacks Rank #3.

Gogo Inc. (NASDAQ:GOGO) has an Earnings ESP of +2.80% and a Zacks Rank #3.

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