The 10-second takeaway
For the quarter ended March 31 (Q1), Financial Engines beat slightly on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share grew significantly.
Gross margins contracted, operating margins improved, and net margins increased.
Financial Engines logged revenue of $41.7 million. The six analysts polled by S&P Capital IQ looked for revenue of $40.9 million on the same basis. GAAP reported sales were 29% higher than the prior-year quarter's $32.3 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 $0.07. The six earnings estimates compiled by S&P Capital IQ predicted $0.08 per share. GAAP EPS of $0.07 for Q1 were 40% higher than the prior-year quarter's $0.05 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 63.3%, 70 basis points worse than the prior-year quarter. Operating margin was 13.7%, 190 basis points better than the prior-year quarter. Net margin was 8.4%, 50 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $43.8 million. On the bottom line, the average EPS estimate is $0.10.
Next year's average estimate for revenue is $182.4 million. The average EPS estimate is $0.48.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 22 members out of 28 rating the stock outperform, and six members rating it underperform. Among 10 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), eight give Financial Engines 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 Financial Engines is outperform, with an average price target of $26.
Over the decades, small-cap stocks like Financial Engines have produced market-beating returns, provided they're value-priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: 2 Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.
- Add Financial Engines 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. 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.