The 10-second takeaway
For the quarter ended March 31 (Q1), Syntel met expectations on revenue and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue improved significantly and GAAP earnings per share grew significantly.
Margins improved across the board.
Syntel recorded revenue of $170.7 million. The 10 analysts polled by S&P Capital IQ wanted to see revenue of $172.1 million on the same basis. GAAP reported sales were 17% higher than the prior-year quarter's $145.4 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 $0.98. The six earnings estimates compiled by S&P Capital IQ averaged $0.76 per share. GAAP EPS of $0.98 for Q1 were 63% higher than the prior-year quarter's $0.60 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 41.8%, 680 basis points better than the prior-year quarter. Operating margin was 26.1%, 810 basis points better than the prior-year quarter. Net margin was 23.9%, 670 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $180.3 million. On the bottom line, the average EPS estimate is $0.76.
Next year's average estimate for revenue is $737.9 million. The average EPS estimate is $3.29.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 179 members out of 191 rating the stock outperform, and 12 members rating it underperform. Among 62 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 58 give Syntel 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 Syntel is outperform, with an average price target of $57.88.
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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.