The 10-second takeaway
For the quarter ended March 31 (Q1), Ancestry.com beat slightly on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share expanded significantly.
Gross margin dropped, operating margin improved, and net margin increased.
Ancestry.com booked revenue of $108.5 million. The seven analysts polled by S&P Capital IQ foresaw a top line of $107.5 million on the same basis. GAAP reported sales were 19% higher than the prior-year quarter's $91.0 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 $0.30. The eight earnings estimates compiled by S&P Capital IQ anticipated $0.26 per share. GAAP EPS of $0.30 for Q1 were 67% higher than the prior-year quarter's $0.18 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 82.4%, 30 basis points worse than the prior-year quarter. Operating margin was 18.5%, 290 basis points better than the prior-year quarter. Net margin was 12.5%, 260 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $116.6 million. On the bottom line, the average EPS estimate is $0.41.
Next year's average estimate for revenue is $461.1 million. The average EPS estimate is $1.59.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 355 members out of 387 rating the stock outperform, and 32 members rating it underperform. Among 110 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 104 give Ancestry.com a green thumbs-up, and six give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Ancestry.com is outperform, with an average price target of $36.00.
New technology paradigms and mobile devices are driving the next wave of Internet services. Many older companies won't survive the change, while fortunes will be made by the first movers in the field. Where does Ancestry.com fit in? What's the fortune-making change? Check out our free report: "The Two Words Bill Gates Doesn't Want You to Hear..." Click here for instant access to this free report.
- Add Ancestry.com 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. The Motley Fool owns shares of Ancestry.com. Motley Fool newsletter services have recommended buying shares of Ancestry.com. 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.