The 10-second takeaway
For the quarter ended June 30 (Q2), Strayer Education beat expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue stayed the same. Non-GAAP earnings per share didn't change. GAAP earnings per share shrank significantly.
Margins dropped across the board.
Strayer Education logged revenue of $146.3 million. The 10 analysts polled by S&P Capital IQ hoped for sales of $130.4 million on the same basis. GAAP reported sales were 9.8% lower than the prior-year quarter's $146.3 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 $1.85. The nine earnings estimates compiled by S&P Capital IQ averaged $1.38 per share. Non-GAAP EPS of $1.85 were the same as the prior-year quarter. GAAP EPS of $1.42 for Q2 were 23% lower than the prior-year quarter's $1.85 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 46.0%, 230 basis points worse than the prior-year quarter. Operating margin was 19.9%, 480 basis points worse than the prior-year quarter. Net margin was 11.4%, 310 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $110.9 million. On the bottom line, the average EPS estimate is $0.01.
Next year's average estimate for revenue is $507.3 million. The average EPS estimate is $4.07.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 245 members out of 310 rating the stock outperform, and 65 members rating it underperform. Among 86 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 68 give Strayer Education a green thumbs-up, and 18 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Strayer Education is hold, with an average price target of $46.17.
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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.