The 10-second takeaway
For the quarter ended March 31 (Q1), Digimarc whiffed on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share expanded significantly.
Margins improved across the board.
Digimarc reported revenue of $17.0 million. The one analyst polled by S&P Capital IQ looked for net sales of $20.0 million on the same basis. GAAP reported sales were 88% higher than the prior-year quarter's $9.1 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 $0.70. The two earnings estimates compiled by S&P Capital IQ anticipated $0.55 per share. GAAP EPS of $0.70 for Q1 were 483% higher than the prior-year quarter's $0.12 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 87.5%, 890 basis points better than the prior-year quarter. Operating margin was 53.7%, 3,150 basis points better than the prior-year quarter. Net margin was 29.3%, 1,900 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $10.0 million. On the bottom line, the average EPS estimate is $0.18.
Next year's average estimate for revenue is $49.8 million. The average EPS estimate is $1.16.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 16 members out of 16 rating the stock outperform. Among four CAPS All-Star picks (recommendations by the highest-ranked CAPS members), four give Digimarc a green thumbs-up.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Digimarc is buy, with an average price target of $53.00.
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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.