Kenexa Beats Up on Analysts Yet Again

Seth Jayson, The Motley Fool
Updated

Kenexa (NYS: KNXA) reported earnings on Feb. 6. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Kenexa beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue improved significantly, and GAAP earnings per share expanded.

Gross margins dropped, operating margins expanded, and net margins improved.

Revenue details
Kenexa logged revenue of $75.7 million. The 12 analysts polled by S&P Capital IQ foresaw sales of $73.7 million. Sales were 28% higher than the prior-year quarter's $50.8 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.23. The 12 earnings estimates compiled by S&P Capital IQ averaged $0.20 per share on the same basis. GAAP EPS were $0.02 for Q3 versus -$0.30 per share for the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 58.8%, 580 basis points worse than the prior-year quarter. Operating margin was 3.7%, 200 basis points better than the prior-year quarter. Net margin was 0.8%, 1,210 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $77.6 million. On the bottom line, the average EPS estimate is $0.26.

Next year's average estimate for revenue is $288.5 million. The average EPS estimate is $0.82.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 68 members rating the stock outperform and six members rating it underperform. Among 36 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 32 give Kenexa a green thumbs-up, and four give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Kenexa is outperform, with an average price target of $33.

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At the time thisarticle was published 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 ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. 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.

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