Ultimate Software Group
The 10-second takeaway
For the quarter ended June 30 (Q2), Ultimate Software Group met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly. Non-GAAP earnings per share increased significantly. GAAP earnings per share grew significantly.
Margins increased across the board.
Ultimate Software Group recorded revenue of $97.5 million. The 20 analysts polled by S&P Capital IQ expected revenue of $97.2 million on the same basis. GAAP reported sales were 23% higher than the prior-year quarter's $79.2 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 $0.34. The 21 earnings estimates compiled by S&P Capital IQ predicted $0.30 per share. Non-GAAP EPS of $0.34 for Q2 were 62% higher than the prior-year quarter's $0.21 per share. GAAP EPS of $0.17 for Q2 were 89% higher than the prior-year quarter's $0.09 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 58.3%, 150 basis points better than the prior-year quarter. Operating margin was 9.2%, 240 basis points better than the prior-year quarter. Net margin was 5.0%, 160 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $102.9 million. On the bottom line, the average EPS estimate is $0.37.
Next year's average estimate for revenue is $409.1 million. The average EPS estimate is $1.41.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 109 members out of 157 rating the stock outperform, and 48 members rating it underperform. Among 53 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 41 give Ultimate Software Group a green thumbs-up, and 12 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Ultimate Software Group is outperform, with an average price target of $110.57.
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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 recommends Ultimate Software Group. 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.