The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Web.com Group whiffed on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue improved significantly and GAAP earnings per share improved.
Gross margins improved, operating margins contracted, and net margins grew.
Web.com Group booked revenue of $73.6 million. The seven analysts polled by S&P Capital IQ predicted revenue of $87.9 million on the same basis. GAAP reported sales were 95% higher than the prior-year quarter's $37.6 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 $0.28. The seven earnings estimates compiled by S&P Capital IQ predicted $0.23 per share on the same basis. GAAP EPS were $0.01 for Q4 versus -$0.64 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 56.4%, 320 basis points better than the prior-year quarter. Operating margin was -42.5%, 2,360 basis points worse than the prior-year quarter. Net margin was 0.7%, 4,350 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $109.4 million. On the bottom line, the average EPS estimate is $0.31.
Next year's average estimate for revenue is $463.1 million. The average EPS estimate is $1.46.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 114 members out of 137 rating the stock outperform, and 23 members rating it underperform. Among 44 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 35 give Web.com Group a green thumbs-up, and nine give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Web.com Group is outperform, with an average price target of $16.25.
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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.
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