The 10-second takeaway
For the quarter ended March 31 (Q1), Web.com Group whiffed on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue improved significantly and GAAP loss per share increased.
Gross margin increased, but both operating margin and net margin dropped.
Web.com Group booked revenue of $91.5 million. The nine analysts polled by S&P Capital IQ hoped for a top line of $111.2 million on the same basis. GAAP-reported sales were much higher than the prior-year quarter's $39.5 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 $0.37. The nine earnings estimates compiled by S&P Capital IQ predicted $0.31 per share. GAAP EPS were -$0.65 for Q1, versus -$0.21 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 57.8%, 260 basis points better than the prior-year quarter. Operating margin was -19.3%, 1,050 basis points worse than the prior-year quarter. Net margin was -32.5%, 1,830 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $114.8 million. On the bottom line, the average EPS estimate is $0.35.
Next year's average estimate for revenue is $468.2 million. The average EPS estimate is $1.47.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 113 members rating the stock outperform and 24 members rating it underperform. Among 41 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 31 give Web.com Group a green thumbs-up, and 10 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Web.com Group is outperform, with an average price target of $17.57.
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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.