The 10-second takeaway
For the quarter ended March 31 (Q4), Advisory Board beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly. Non-GAAP earnings per share increased significantly. GAAP earnings per share dropped significantly.
Gross margins increased, operating margins contracted, net margins shrank.
Advisory Board recorded revenue of $119.7 million. The 11 analysts polled by S&P Capital IQ foresaw revenue of $117.9 million on the same basis. GAAP reported sales were 19% higher than the prior-year quarter's $100.5 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 $0.33. The 10 earnings estimates compiled by S&P Capital IQ forecast $0.28 per share. Non-GAAP EPS of $0.33 for Q4 were 43% higher than the prior-year quarter's $0.23 per share. (The prior-year quarter included $0.06 per share in earnings from discontinued operations.) GAAP EPS of $0.18 for Q4 were 22% lower than the prior-year quarter's $0.23 per share. (The prior-year quarter included $0.06 per share in earnings from discontinued operations.)
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 48.6%, 190 basis points better than the prior-year quarter. Operating margin was 10.6%, 160 basis points worse than the prior-year quarter. Net margin was 5.3%, 280 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $121.8 million. On the bottom line, the average EPS estimate is $0.28.
Next year's average estimate for revenue is $521.3 million. The average EPS estimate is $1.30.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 41 members out of 72 rating the stock outperform, and 31 members rating it underperform. Among 32 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 22 give Advisory Board a green thumbs-up, and 10 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Advisory Board is outperform, with an average price target of $51.78.
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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 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.