The 10-second takeaway
For the quarter ended March 31 (Q1), Capella Education met expectations on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped slightly and GAAP earnings per share contracted.
Margins contracted across the board.
Capella Education chalked up revenue of $109.4 million. The 12 analysts polled by S&P Capital IQ looked for sales of $109.9 million on the same basis. GAAP reported sales were 1.8% lower than the prior-year quarter's $111.4 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 $0.82. The 13 earnings estimates compiled by S&P Capital IQ forecast $0.78 per share. GAAP EPS of $0.82 for Q1 were 8.9% lower than the prior-year quarter's $0.90 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 57.2%, 460 basis points worse than the prior-year quarter. Operating margin was 16.4%, 540 basis points worse than the prior-year quarter. Net margin was 10.3%, 280 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $105.3 million. On the bottom line, the average EPS estimate is $0.80.
Next year's average estimate for revenue is $429.2 million. The average EPS estimate is $3.12.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 225 members out of 238 rating the stock outperform, and 13 members rating it underperform. Among 63 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 61 give Capella Education a green thumbs-up, and two give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Capella Education is hold, with an average price target of $44.09.
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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.