The 10-second takeaway
For the quarter ended June 30 (Q3), Liquidity Services missed slightly on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share expanded.
Margins improved across the board.
Liquidity Services logged revenue of $121.3 million. The nine analysts polled by S&P Capital IQ wanted to see net sales of $123.3 million on the same basis. GAAP reported sales were 41% higher than the prior-year quarter's $86.1 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 $0.56. The nine earnings estimates compiled by S&P Capital IQ forecast $0.46 per share. GAAP EPS were $0.45 for Q3 against -$0.04 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 46.3%, 220 basis points better than the prior-year quarter. Operating margin was 21.8%, 870 basis points better than the prior-year quarter. Net margin was 12.3%, 1,350 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $116.8 million. On the bottom line, the average EPS estimate is $0.40.
Next year's average estimate for revenue is $471.1 million. The average EPS estimate is $1.85.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 346 members rating the stock outperform and 29 members rating it underperform. Among 99 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 93 give Liquidity Services 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 Liquidity Services is buy, with an average price target of $70.13.
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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. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Liquidity Services. 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.