The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Rosetta Stone beat expectations on revenues and exceeded expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded, and GAAP earnings per share shrank to a loss.
Margins shrank across the board.
Rosetta Stone reported revenue of $80.5 million. The four analysts polled by S&P Capital IQ looked for revenue of $67.9 million on the same basis. GAAP reported sales were 8.4% higher than the prior-year quarter's $74.3 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at -$0.24. The six earnings estimates compiled by S&P Capital IQ averaged -$0.28 per share. GAAP EPS were -$0.24 for Q4 against $0.24 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 81.6%, 180 basis points worse than the prior-year quarter. Operating margin was -4.1%, 760 basis points worse than the prior-year quarter. Net margin was -6.2%, 1,290 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $60.6 million. On the bottom line, the average EPS estimate is -$0.44.
Next year's average estimate for revenue is $283.8 million. The average EPS estimate is -$0.50.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 707 members rating the stock outperform and 86 members rating it underperform. Among 190 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 172 give Rosetta Stone a green thumbs-up, and 18 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Rosetta Stone is hold, with an average price target of $7.67.
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