Overview

• AI research workflow platform's fiscal Q3 revenue declined 4.3% yr/yr, missing analyst expectations

• Net income for fiscal Q3 rose 297% yr/yr to $860,000

• Company's gross margin improved 220 basis points, driven by shift to higher-margin platform business

Outlook

• Company did not provide specific guidance for the current or future quarters

Result Drivers

• PLATFORM REVENUE GROWTH - Co said platform revenue rose 6.69% yr/yr due to organic growth in B2B platform, new customer acquisitions, and upselling to existing customers

• TRANSACTION REVENUE DECLINE - Co attributed 11% yr/yr drop in transaction revenue to lower volume from a churned customer and a few large customers

• GROSS MARGIN IMPROVEMENT - Co said gross margin rose due to continued revenue mix shift to higher-margin platform business

Company press release: ID:nPn3LX8qMa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the online services peer group is "buy"

• Wall Street's median 12-month price target for Research Solutions Inc is $5.00, about 99.2% above its May 13 closing price of $2.51

• The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 17 three months ago

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