It's not often you can say about a company, "It's never missed estimates," but educational software maker Blackboard (NASDAQ:BBBB) is indeed one such company. Since going public in June 2004, the educational software maker has beaten estimates nine times and matched just once. On Tuesday, the firm attempts to extend its streak further into the double digits.

What analysts say:

  • Buy, sell, or waffle? Eleven analysts now follow Blackboard -- nearly twice the number we had just six months ago -- giving the firm eight buys and three hold ratings.
  • Revenues. On average, analysts believe Blackboard booked $50.2 million in revenues during Q4 2006, 41% better than last year.
  • Earnings. Profits are unlikely to be in evidence, however. The consensus is that we'll see instead a $0.02-per-share loss.

What management says:
Blackboard CEO Michael Chasen made painfully obvious his reticence to speak about less-than-complimentary year-over-year comparisons last quarter. Highlighting the firm's 40% revenue growth, he stated the quarterly GAAP loss of $0.17 per share, and the pro forma profit of $0.02 per share, as bare facts without historical context. (Not that context would have been easily stated in percentage terms. The previous year's quarterly numbers were positive.) But he needn't have been so shy about the "bad" numbers. Plenty of good ones were in there, too. For example, the $24 million in operating cash flow -- that was more than double what Blackboard cranked out in the first three quarters of 2005 combined.

What management does:
Margins were another matter. On a rolling basis, the gross has been falling for two straight quarters, and the operating and net for three each. The bottom-line drop, it should be noted, was inevitable, as Blackboard took a $15 million tax credit in the December 2005 quarter, inflating the rolling tallies in that and the next three quarters. Tomorrow, it will stop inflating results entirely -- meaning this will be the last quarter in which net margins are preordained to decline.

Margins

6/05

9/05

12/05

3/06

6/06

9/06

Gross

69.9%

70.5%

70.6%

70.8%

70.0%

69.5%

Operating

14.9%

16.9%

18.1%

13.4%

6.8%

1.4%

Net

15.9%

18.1%

30.9%

25.7%

15.8%

7.3%
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
Covering developments at Blackboard in his semiannual review of all his Motley Fool Hidden Gems recommendations, Gems co-analyst Tom Gardner looked at the firm's successful integration of erstwhile archrival WebCT. He noted how the combined company is successfully increasing renewal rates from WebCT proper's historical numbers, reiterated his judgment that the firm is "dominant" in the Web-based education space, and pronounced the firm a "buy."

But at what price, you ask? We'll be glad to tell you. Claim a one-month subscription to Hidden Gems (yes, as always, the trial offer is free). Then click this link to go directly to Tom's most recent analysis of Blackboard, where you'll learn what price Tom thinks is right.

Competitors:

  • VCampus (NASDAQ:VCMP)
  • SumTotal Systems (NASDAQ:SUMT)
  • Saba Software (NASDAQ:SABA)
  • eCollege.com (NASDAQ:ECLG)

Fool contributor Rich Smith does not own shares of any company named above.