Alliance Data Systems
The 10-second takeaway
For the quarter ended June 30 (Q2), Alliance Data Systems met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly. Non-GAAP earnings per share grew. GAAP earnings per share grew.
Margins dropped across the board.
Alliance Data Systems tallied revenue of $1.03 billion. The 19 analysts polled by S&P Capital IQ expected a top line of $1.03 billion on the same basis. GAAP reported sales were 19% higher than the prior-year quarter's $866.5 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
EPS came in at $2.41. The 20 earnings estimates compiled by S&P Capital IQ forecast $2.30 per share. Non-GAAP EPS of $2.41 for Q2 were 13% higher than the prior-year quarter's $2.13 per share. GAAP EPS of $1.71 for Q2 were 4.9% higher than the prior-year quarter's $1.63 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
For the quarter, gross margin was 31.4%, 410 basis points worse than the prior-year quarter. Operating margin was 26.2%, 160 basis points worse than the prior-year quarter. Net margin was 11.3%, 70 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $1.07 billion. On the bottom line, the average EPS estimate is $2.66.
Next year's average estimate for revenue is $4.28 billion. The average EPS estimate is $9.96.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 197 members out of 231 rating the stock outperform, and 34 members rating it underperform. Among 76 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 70 give Alliance Data Systems a green thumbs-up, and six give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Alliance Data Systems is outperform, with an average price target of $186.16.
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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. 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.