The 10-second takeaway
For the quarter ended Dec. 31 (Q3), Virtusa beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share expanded significantly.
Gross margins dropped, operating margins increased, net margins expanded.
Virtusa chalked up revenue of $86.5 million. The eight analysts polled by S&P Capital IQ expected revenue of $85.6 million on the same basis. GAAP reported sales were 20% higher than the prior-year quarter's $72.2 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 $0.29. The eight earnings estimates compiled by S&P Capital IQ predicted $0.28 per share. GAAP EPS of $0.29 for Q3 were 32% higher than the prior-year quarter's $0.22 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%, 30 basis points worse than the prior-year quarter. Operating margin was 10.6%, 150 basis points better than the prior-year quarter. Net margin was 8.6%, 90 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $88.8 million. On the bottom line, the average EPS estimate is $0.32.
Next year's average estimate for revenue is $331.0 million. The average EPS estimate is $1.07.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 102 members out of 107 rating the stock outperform, and five members rating it underperform. Among 37 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 37 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 buy, with an average price target of $22.67.
Is Virtusa playing the right part in the new technology revolution? Computers, mobile devices, and related services are creating huge amounts of valuable data, but only for companies that can crunch the numbers and make sense of it. Meet the leader in this field in "The Only Stock You Need To Profit From the NEW Technology Revolution." Click here for instant access to this free report.
- Add Virtusa 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. The Motley Fool has no position in any of the stocks mentioned. 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.