The 10-second takeaway
For the quarter ended Dec. 31 (Q4), eResearchTechnology beat expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share increased.
Margins dropped across the board.
eResearchTechnology recorded revenue of $52.3 million. The six analysts polled by S&P Capital IQ wanted to see revenue of $47.8 million on the same basis. GAAP reported sales were 16% higher than the prior-year quarter's $44.9 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 $0.11. The two earnings estimates compiled by S&P Capital IQ forecast $0.08 per share on the same basis. GAAP EPS of $0.09 for Q4 were 13% higher than the prior-year quarter's $0.08 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 40.9%, 300 basis points worse than the prior-year quarter. Operating margin was 12.1%, 90 basis points worse than the prior-year quarter. Net margin was 8.7%, 50 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $46.7 million. On the bottom line, the average EPS estimate is $0.08.
Next year's average estimate for revenue is $200.1 million. The average EPS estimate is $0.42.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 175 members out of 183 rating the stock outperform, and eight members rating it underperform. Among 49 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 48 give eResearchTechnology 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 eResearchTechnology is outperform, with an average price target of $7.43.
Over the decades, small-cap stocks, like eResearchTechnology 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 eResearchTechnology 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.