The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Ancestry.com beat expectations 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 shrank, operating margins grew, net margins expanded.
Ancestry.com recorded revenue of $128.4 million. The eight analysts polled by S&P Capital IQ expected a top line of $123.6 million on the same basis. GAAP reported sales were 24% higher than the prior-year quarter's $103.1 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 $0.54. The nine earnings estimates compiled by S&P Capital IQ predicted $0.55 per share. GAAP EPS of $0.54 for Q3 were 35% higher than the prior-year quarter's $0.40 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 82.0%, 170 basis points worse than the prior-year quarter. Operating margin was 28.0%, 170 basis points better than the prior-year quarter. Net margin was 19.4%, 90 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $124.6 million. On the bottom line, the average EPS estimate is $0.58.
Next year's average estimate for revenue is $475.9 million. The average EPS estimate is $2.00.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 348 members out of 385 rating the stock outperform, and 37 members rating it underperform. Among 101 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 89 give Ancestry.com a green thumbs-up, and 12 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Ancestry.com is outperform, with an average price target of $37.89.
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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 owns shares of Ancestry.com. Motley Fool newsletter services recommend Ancestry.com. 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.