The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Capella Education met expectations on revenue and missed expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted and GAAP earnings per share dropped significantly.
Margins contracted across the board.
Capella Education logged revenue of $110.0 million. The 13 analysts polled by S&P Capital IQ wanted to see sales of $110.3 million on the same basis. GAAP reported sales were 4.1% lower than the prior-year quarter's $114.7 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.90. The 13 earnings estimates compiled by S&P Capital IQ averaged $0.91 per share on the same basis. GAAP EPS of $0.85 for Q4 were 22% lower than the prior-year quarter's $1.09 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 59.7%, 370 basis points worse than the prior-year quarter. Operating margin was 18.3%, 640 basis points worse than the prior-year quarter. Net margin was 11.0%, 470 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $108.8 million. On the bottom line, the average EPS estimate is $0.85.
Next year's average estimate for revenue is $424.5 million. The average EPS estimate is $3.18.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 221 members out of 233 rating the stock outperform, and 12 members rating it underperform. Among 76 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 75 give Capella Education 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 Capella Education is hold, with an average price target of $41.60.
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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.