K12
The 10-second takeaway
For the quarter ended March 31 (Q3), K12 beat expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly and GAAP earnings per share improved.
Gross margins grew, operating margins contracted, and net margins dropped.
Revenue details
K12 logged revenue of $178.2 million. The four analysts polled by S&P Capital IQ anticipated revenue of $166.5 million on the same basis. GAAP reported sales were 37% higher than the prior-year quarter's $130.3 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS details
EPS came in at $0.18. The four earnings estimates compiled by S&P Capital IQ anticipated $0.22 per share. GAAP EPS of $0.18 for Q3 were 13% higher than the prior-year quarter's $0.16 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
Margin details
For the quarter, gross margin was 40.5%, 20 basis points better than the prior-year quarter. Operating margin was 6.5%, 180 basis points worse than the prior-year quarter. Net margin was 3.9%, 40 basis points worse than the prior-year quarter.
Looking ahead
Next quarter's average estimate for revenue is $165.6 million. On the bottom line, the average EPS estimate is -$0.05.
Next year's average estimate for revenue is $701.6 million. The average EPS estimate is $0.39.
Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 180 members out of 200 rating the stock outperform, and 20 members rating it underperform. Among 54 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 49 give K12 a green thumbs-up, and five give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on K12 is outperform, with an average price target of $31.29.
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