The 10-second takeaway
For the quarter ended March 31 (Q4), Virtusa met expectations on revenues and earnings per share.
Compared with the prior-year quarter, revenue increased significantly and GAAP earnings per share improved.
Gross margins contracted, operating margins grew, net margins dropped.
Virtusa logged revenue of $74.2 million. The eight analysts polled by S&P Capital IQ wanted to see a top line of $74.4 million on the same basis. GAAP reported sales were 27% higher than the prior-year quarter's $58.3 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 $0.23. The six earnings estimates compiled by S&P Capital IQ anticipated $0.23 per share. GAAP EPS of $0.23 for Q4 were 9.5% higher than the prior-year quarter's $0.21 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 35.6%, 130 basis points worse than the prior-year quarter. Operating margin was 9.5%, 320 basis points better than the prior-year quarter. Net margin was 7.8%, 120 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $76.8 million. On the bottom line, the average EPS estimate is $0.22.
Next year's average estimate for revenue is $326.4 million. The average EPS estimate is $1.04.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 96 members out of 102 rating the stock outperform, and six members rating it underperform. Among 29 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 29 give Virtusa a green thumbs-up, and give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Virtusa is outperform, with an average price target of $20.00.
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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. He is the 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 don't 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.