Medidata Solutions Earnings:3 Things to Watch

Short-Term Investors

Wall Street ExpectationsRevenueQ2: $81.9 millionFull Year: $341.1 million

Earnings per ShareQ2: $0.18Full Year: $0.75

Short-Term Investors

•Before last quarter, Medidata’s earnings had exceeded analyst expectations for five straight quarters. Over that time frame, the stock more than doubled.

•However, when the company failed to meet expectations in April, the stock slipped as much as 30%.

•Because it currently trades for 54 times trailing earnings, the stock will continue to move heavily based on how it performs versus Wall Street expectations.

Short-Term Investors

Medium-Term Investors

Growing Customer BaseInvestors will be watching to see if more and more drug companies use Medidata to manage drug development logistics.

Medium-Term Investors

•Medidata has consistently added to its customer base by roughly 5% on a quarter-by-quarter basis.

•If the company can reach 440 total customers, investors will know that the company is still gaining traction with drug and life sciences companies.

Medium-Term Investors

Long-Term Investors

Using multiple productsThe life sciences industry is only so big. Investors believe Medidata can continue growing revenues by offering add-on services.

Long-Term Investors

•For most of the history of the company, Medidata’s “Rave” cloud system has accounted for most of the company’s revenue.

•However, recently Medidata has started adding more add-on products that not only add value, but make switching costs very high for customers.

•If Medidata can grow its percentage of customers using more than one product to 54%, that would be a great sign for investors.

Long-Term Investors

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