The 10-second takeaway
For the quarter ended Oct. 31 (Q2), American Software beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew slightly and GAAP earnings per share dropped.
Margins dropped across the board.
American Software booked revenue of $26.3 million. The one analyst polled by S&P Capital IQ predicted sales of $25.7 million on the same basis. GAAP reported sales were 2.6% higher than the prior-year quarter's $25.6 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 one earnings estimate compiled by S&P Capital IQ predicted $0.09 per share. GAAP EPS of $0.10 for Q2 were 9.1% lower than the prior-year quarter's $0.11 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 55.9%, 130 basis points worse than the prior-year quarter. Operating margin was 16.1%, 230 basis points worse than the prior-year quarter. Net margin was 10.6%, 100 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $27.9 million. On the bottom line, the average EPS estimate is $0.11.
Next year's average estimate for revenue is $111.5 million. The average EPS estimate is $0.45.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 306 members out of 319 rating the stock outperform, and 13 members rating it underperform. Among 77 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 72 give American Software 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 American Software is buy, with an average price target of $14.00.
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