The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Kforce beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded, and GAAP earnings per share expanded significantly.
Gross margins contracted, operating margins shrank, and net margins were steady.
Kforce reported revenue of $285.6 million. The eight analysts polled by S&P Capital IQ expected revenue of $281.7 million. Sales were 10% higher than the prior-year quarter's $258.5 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
EPS came in at $0.20. The eight earnings estimates compiled by S&P Capital IQ averaged $0.19 per share. GAAP EPS of $0.20 for Q4 were 25% higher than the prior-year quarter's $0.16 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 31.2%, 70 basis points worse than the prior-year quarter. Operating margin was 4.1%, 20 basis points worse than the prior-year quarter. Net margin was 2.5%, about the same as the prior-year quarter.
Next quarter's average estimate for revenue is $285.3 million. On the bottom line, the average EPS estimate is $0.15.
Next year's average estimate for revenue is $1.19 billion. The average EPS estimate is $0.86.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 87 members rating the stock outperform and 10 members rating it underperform. Among 37 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 35 give Kforce a green thumbs-up, and two give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Kforce is outperform, with an average price target of $15.38.
Over the decades, small-cap stocks, like Kforce have provided market-beating returns, provided they're value priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: Two Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.
- Add Kforce to My Watchlist.
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.