The earnings will be released in a few days. That will be an important event for the stock, and it is important that it delivers better than expected numbers. This is especially true due to the recent appreciation in the stock. It is about 50% up on a 52 week basis, and nearly 30% up on a year to date basis. The reduction in losses and increase in revenues over the last few quarters has improved the sentiments for the stock. As per an article on the fool network, average analyst estimates for Q2'13 predict that the company's revenues will increase by 20%, and it will report a net loss of 7 cents per share. In the last quarter, the revenues had increased by 17% and the net loss had reduced significantly from $6.55 million to $3.5 million on a yoy basis. Even sequentially, there was growth in revenues and reduction in net loss. As mentioned in the article, the gross margin was 23.1%, 20 basis points better than the prior-year quarter. Operating margin was -3.0%, 440 basis points better than the prior-year quarter. Net margin was -3.1%, 470 basis points better than the prior-year quarter. The full year's average estimate for revenue is ~$394 million (~$331 million in 2012), while the net loss is expected to be 33 cents per share (59 cents in 2012). The management has achieved visible results by improving the margins, but full year profitability is still a bit far away. The topline growth needs to continue, but it is important to focus on higher margin products so that the improvement in margins continues. The growth in the market is likely to remain reasonable, with big and small players bringing new innovative products. Chromadex (CDXC) is in the news for its molecule Nicotinamide Riboside (a vitamin derivative with use in multiple indications including obesity), and there are other players which are attempting to leverage the growth story. For Vitacost, the next earnings will be extremely crucial in determining the short term trend.
