The 10-second takeaway
For the quarter ended Sep. 30 (Q1), K12 met expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue grew and GAAP earnings per share contracted.
Gross margins grew, operating margins dropped, net margins contracted.
K12 recorded revenue of $221.1 million. The five analysts polled by S&P Capital IQ anticipated revenue of $221.7 million on the same basis. GAAP reported sales were 14% higher than the prior-year quarter's $193.3 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.11. The six earnings estimates compiled by S&P Capital IQ anticipated $0.13 per share. GAAP EPS of $0.11 for Q1 were 8.3% lower than the prior-year quarter's $0.12 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 46.3%, 190 basis points better than the prior-year quarter. Operating margin was 3.9%, 40 basis points worse than the prior-year quarter. Net margin was 2.0%, 40 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $204.4 million. On the bottom line, the average EPS estimate is $0.21.
Next year's average estimate for revenue is $849.4 million. The average EPS estimate is $0.70.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 171 members out of 194 rating the stock outperform, and 23 members rating it underperform. Among 48 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 40 give K12 a green thumbs-up, and eight 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 $28.50.
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