What to Expect from K12 (LRN)

What to Expect from K12

K12 (NYSE: LRN ) is expected to report Q4 earnings around Sep. 9. 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 K12's revenues will increase 28.9% and EPS will remain in the red.

The average estimate for revenue is $165.4 million. On the bottom line, the average EPS estimate is -$0.04.

Revenue details
Last quarter, K12 chalked up revenue of $178.2 million. 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
Last quarter, EPS came in at $0.18. 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.

Recent performance
For the preceding 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

The full year's average estimate for revenue is $703.6 million. The average EPS estimate is $0.41.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 176 members out of 195 rating the stock outperform, and 19 members rating it underperform. Among 44 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 41 give K12 a green thumbs-up, and three 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.

Add K12 to My Watchlist.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend K12. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.