Are You Expecting This from Mentor Graphics?

Mentor Graphics (Nasdaq: MENT  ) is expected to report Q1 earnings on May 23. 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 Mentor Graphics's revenues will compress -9.2% and EPS will drop -83.3%.

The average estimate for revenue is $225.2 million. On the bottom line, the average EPS estimate is $0.05.

Revenue details
Last quarter, Mentor Graphics reported revenue of $331.2 million. GAAP reported sales were 3.4% higher than the prior-year quarter's $320.4 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 $0.58. GAAP EPS of $0.49 for Q4 were 3.9% lower than the prior-year quarter's $0.51 per share.

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 86.2%, 50 basis points worse than the prior-year quarter. Operating margin was 22.2%, 10 basis points worse than the prior-year quarter. Net margin was 18.6%, 60 basis points better than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $1.16 billion. The average EPS estimate is $1.52.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 107 members out of 140 rating the stock outperform, and 33 members rating it underperform. Among 29 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 22 give Mentor Graphics a green thumbs-up, and seven give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Mentor Graphics is outperform, with an average price target of $20.29.

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