The 10-second takeaway
For the quarter ended March 31 (Q3), K12 beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly. GAAP earnings per share grew significantly.
Margins increased across the board.
K12 logged revenue of $218.0 million. The seven analysts polled by S&P Capital IQ hoped for revenue of $212.9 million on the same basis. GAAP reported sales were 22% higher than the prior-year quarter's $178.2 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 $0.31. The seven earnings estimates compiled by S&P Capital IQ predicted $0.23 per share. GAAP EPS of $0.31 for Q3 were 72% higher than the prior-year quarter's $0.18 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 41.4%, 90 basis points better than the prior-year quarter. Operating margin was 8.9%, 240 basis points better than the prior-year quarter. Net margin was 5.5%, 160 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $203.8 million. On the bottom line, the average EPS estimate is $0.11.
Next year's average estimate for revenue is $844.9 million. The average EPS estimate is $0.69.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 163 members out of 188 rating the stock outperform, and 25 members rating it underperform. Among 44 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 35 give K12 a green thumbs-up, and nine give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on K12 is outperform, with an average price target of $25.86.
Looking for alternatives to K12? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, "3 Stocks That Will Help You Retire Rich." Click here for instant access to this free report.
- Add K12 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 recommends K12. 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.