The 10-second takeaway
For the quarter ended Dec. 31 (Q1), Keynote Systems beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly, and GAAP earnings per share dropped.
Margins dropped across the board.
Keynote Systems notched revenue of $33.1 million. The six analysts polled by S&P Capital IQ predicted revenue of $31.1 million. Sales were 33% higher than the prior-year quarter's $24.8 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $0.32. The six earnings estimates compiled by S&P Capital IQ forecast $0.25 per share on the same basis. GAAP EPS of $0.22 for Q1 were 4.3% lower than the prior-year quarter's $0.23 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 53.2%, 340 basis points worse than the prior-year quarter. Operating margin was 10.4%, 440 basis points worse than the prior-year quarter. Net margin was 12.5%, 210 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $30.7 million. On the bottom line, the average EPS estimate is $0.23.
Next year's average estimate for revenue is $130.2 million. The average EPS estimate is $1.11.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 83 members out of 94 rating the stock outperform, and 11 members rating it underperform. Among 24 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 20 give Keynote Systems a green thumbs-up, and four give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Keynote Systems is buy, with an average price target of $26.85.
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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. 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.