AMERI Holdings (AMRH) Stock: Rocketing On Earnings

AMERI Holdings Inc (NASDAQ: AMRH) reported its financial results for the third quarter this morning, exciting investors. That excitement can be seen in the massive gains that we’re seeing in the value of the stock. Today, we’ll talk about the earnings report, what we’re seeing from AMRH as a result, and what we’ll be watching for ahead.

AMRH Announces Earnings

As mentioned above, AMERI Holdings is having a great day in the market today after reporting its earnings. In fact, not only is the stock one of the biggest gainers on the market today, it’s trading with some of the highest volume. Here’s what we saw from the report:

  • Revenue – In terms of revenue, AMRH has seen a bit of a decline, falling from $12.5 million in the third quarter of last year to $10.6 million in the third quarter this year.
  • Gross Profit – Gross profits also saw a bit of a decline, falling to $2.3 million from $2.6 million.
  • Gross Margins – This is where things start getting good. In the third quarter, the company generated a gross margin of 22.2%. That’s a strong gain from the 20.5% gross margin reported in the third quarter of last year.
  • GAAP Net Income – GAAP net income came to $3.9 million. That compared well to the GAAP loss of $4.6 million in the same quarter last year.
  • Diluted Earnings – Finally, the company reported diluted earnings per share in the amount of $0.16. That showed impressive growth over the loss of $0.31 per share in the same quarter last year.
  • Adjusted EBITDA – Finally, adjusted EBITDA came in at $5,403 for the quarter, comparing well to the adjusted EBITDA loss of $426,092 in the third quarter of last year.

In a statement, Brent Kelton, CEO at AMRH, had the following to offer:

Our 2018 third quarter results attest to a purposeful focus on both quality of revenue and Adjusted EBITDA profitability. Continued execution of our high margin solutions sales strategy yielded a 172-basis point sequential improvement in gross margin and a second consecutive quarter of year-over-year positive Adjusted EBITDA. We are winning digital transformation projects because of our deep SAP domain expertise, broadened solutions offerings and an elevated profile within the SAP ecosystem following recent marquee wins and deployments. During the quarter we added to our client base, including our first healthcare market project and a leading golf lifestyle apparel brand. We also closed on a private placement that gives us the financial flexibility to pursue our organic growth strategy.

Ameri100 is differentiated in the market as the only SAP solutions-focused, publicly-traded IT services company. We are building a deep partner network around our unique market position that is generating new solutions sales opportunities to supplement our sales efforts and is driving an expanding deal pipeline. With cloud computing central to SAP’s strategy, we are in the advanced stages of formalizing a partnership with a Top-3 cloud vendor that contributed a new client win for us with a Fortune 500 insurance company subsequent to the close of the quarter. Our machine learning partnership is driving both existing and prospective clients to inquire about this capability. SAP is also playing an increasing role in our business development efforts. Since the start of 2018 we have seen a substantial increase in our deal pipeline.

Looking ahead, favorable market trends support our revenue trajectory, and as we leverage our cost-efficient infrastructure and continue to shift revenue mix towards high-margin solutions sales, we expect to increase profitability. Our improving operating results, clean balance sheet, highly motivated salesforce and engaged partner base put us on a path to sustained growth.

What We’re Seeing From The Stock 

One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of AMRH, the news proved to be overwhelmingly positive. Not only did the company generate strong earnings, it was the second consecutive quarter of EBITDA profitability. So, it comes as no surprise to see that excited investors are pushing the stock on a run for the top this morning. At the moment (10:25), AMRH is trading at $0.34 per share after a gain of $0.069 per share or 25.24% thus far today.

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What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will continue to keep a close eye on AMRH. In particular, we’re interested in following the story surrounding the company’s continued work to bring further profitability down the line. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!

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