The 10-second takeaway
For the quarter ended Feb. 29 (Q3), Scholastic beat expectations on revenue and exceeded expectations on earnings per share.
Compared to the prior-year quarter, revenue improved significantly and GAAP loss per share shrank.
Margins improved across the board.
Scholastic booked revenue of $467.0 million. The one analyst polled by S&P Capital IQ predicted a top line of $393.0 million on the same basis. GAAP reported sales were 19% higher than the prior-year quarter's $393.7 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 -$0.02. The two earnings estimates compiled by S&P Capital IQ forecast -$0.70 per share on the same basis. GAAP EPS were -$0.10 for Q3 versus -$0.80 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 53.0%, 390 basis points better than the prior-year quarter. Operating margin was 0.1%, 790 basis points better than the prior-year quarter. Net margin was -0.7%, 570 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $560.9 million. On the bottom line, the average EPS estimate is $0.79.
Next year's average estimate for revenue is $2.03 billion. The average EPS estimate is $2.82.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 63 members out of 93 rating the stock outperform, and 30 members rating it underperform. Among 35 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 27 give Scholastic a green thumbs-up, and eight give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Scholastic is outperform, with an average price target of $37.00.
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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.