The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Sourcefire beat expectations on revenues and earnings per share.
Compared to the prior-year quarter, revenue expanded significantly and GAAP earnings per share contracted.
Margins contracted across the board.
Sourcefire booked revenue of $53.2 million. The 16 analysts polled by S&P Capital IQ expected revenue of $47.0 million on the same basis. GAAP reported sales were 40% higher than the prior-year quarter's $38.0 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 $0.25. The 16 earnings estimates compiled by S&P Capital IQ forecast $0.19 per share on the same basis. GAAP EPS of $0.14 for Q4 were 6.7% lower than the prior-year quarter's $0.15 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 76.9%, 240 basis points worse than the prior-year quarter. Operating margin was 12.7%, 100 basis points worse than the prior-year quarter. Net margin was 7.8%, 380 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $41.6 million. On the bottom line, the average EPS estimate is $0.07.
Next year's average estimate for revenue is $201.5 million. The average EPS estimate is $0.72.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 93 members out of 119 rating the stock outperform, and 26 members rating it underperform. Among 28 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 24 give Sourcefire 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 Sourcefire is outperform, with an average price target of $34.85.
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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.