The 10-second takeaway
For the quarter ended March 31 (Q3), K12 beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly. GAAP earnings per share grew significantly.
Margins increased across the board.
K12 logged revenue of $218.0 million. The seven analysts polled by S&P Capital IQ hoped for revenue of $212.9 million on the same basis. GAAP reported sales were 22% higher than the prior-year quarter's $178.2 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 $0.31. The seven earnings estimates compiled by S&P Capital IQ predicted $0.23 per share. GAAP EPS of $0.31 for Q3 were 72% higher than the prior-year quarter's $0.18 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 41.4%, 90 basis points better than the prior-year quarter. Operating margin was 8.9%, 240 basis points better than the prior-year quarter. Net margin was 5.5%, 160 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $203.8 million. On the bottom line, the average EPS estimate is $0.11.
Next year's average estimate for revenue is $844.9 million. The average EPS estimate is $0.69.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 163 members out of 188 rating the stock outperform, and 25 members rating it underperform. Among 44 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 35 give K12 a green thumbs-up, and nine 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 $25.86.
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