The 10-second takeaway
For the quarter ended March 31 (Q1), Rosetta Stone missed slightly on revenues and missed expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted. GAAP loss per share grew.
Gross margins expanded, operating margins contracted, net margins shrank.
Rosetta Stone booked revenue of $63.9 million. The four analysts polled by S&P Capital IQ wanted to see sales of $65.1 million on the same basis. GAAP reported sales were 8.0% lower than the prior-year quarter's $69.4 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 -$0.22. The four earnings estimates compiled by S&P Capital IQ predicted -$0.08 per share. GAAP EPS were -$0.22 for Q1 versus -$0.09 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 83.9%, 330 basis points better than the prior-year quarter. Operating margin was -6.5%, 310 basis points worse than the prior-year quarter. Net margin was -7.4%, 470 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $64.3 million. On the bottom line, the average EPS estimate is -$0.11.
Next year's average estimate for revenue is $284.4 million. The average EPS estimate is $0.03.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 684 members out of 774 rating the stock outperform, and 90 members rating it underperform. Among 172 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 154 give Rosetta Stone a green thumbs-up, and 18 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Rosetta Stone is hold, with an average price target of $14.50.
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