The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Higher One whiffed on revenue and missed expectations on earnings per share.
Compared to the prior-year quarter, revenue increased and GAAP earnings per share shrank.
Gross margins grew, operating margins contracted, and net margins dropped.
Higher One logged revenue of $41.7 million. The nine analysts polled by S&P Capital IQ expected sales of $51.4 million. Sales were 3.5% lower than the prior-year quarter's $39.8 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
EPS came in at $0.13. The five earnings estimates compiled by S&P Capital IQ forecast $0.17 per share. GAAP EPS of $0.13 for Q4 were 7.1% lower than the prior-year quarter's $0.14 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 59.1%, 70 basis points better than the prior-year quarter. Operating margin was 27.1%, 2,280 basis points worse than the prior-year quarter. Net margin was 18.3%, 140 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $60.2 million. On the bottom line, the average EPS estimate is $0.28.
Next year's average estimate for revenue is $221.6 million. The average EPS estimate is $0.85.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 35 members out of 37 rating the stock outperform, and two members rating it underperform. Among 10 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), nine give Higher One a green thumbs-up, and one gives it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Higher One is outperform, with an average price target of $23.00.
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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. The Motley Fool owns shares of Higher One. 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.