Magic Software Enterprises Beats on Both Top and Bottom Lines
Magic Software Enterprises (NAS: MGIC) reported earnings on May 7. Here are the numbers you need to know.
The 10-second takeaway
For the quarter ended March 31 (Q1), Magic Software Enterprises beat expectations on revenues and earnings per share.
Compared with the prior-year quarter, revenue improved significantly and GAAP earnings per share grew significantly.
Margins improved across the board.
Magic Software Enterprises notched revenue of $30.0 million. The two analysts polled by S&P Capital IQ foresaw revenue of $29.3 million on the same basis. GAAP reported sales were 18% higher than the prior-year quarter's $25.5 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 $0.12. The two earnings estimates compiled by S&P Capital IQ predicted $0.10 per share. GAAP EPS of $0.11 for Q1 were 38% higher than the prior-year quarter's $0.08 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 43.7%, 320 basis points better than the prior-year quarter. Operating margin was 14.1%, 180 basis points better than the prior-year quarter. Net margin was 14.0%, 180 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $31.5 million. On the bottom line, the average EPS estimate is $0.12.
Next year's average estimate for revenue is $128.2 million. The average EPS estimate is $0.49.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 124 members out of 131 rating the stock outperform, and seven members rating it underperform. Among 14 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 12 give Magic Software Enterprises a green thumbs-up, and two give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Magic Software Enterprises is outperform, with an average price target of $9.50.
Over the decades, small-cap stocks like Magic Software Enterprises have provided market-beating returns, provided they're value-priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: Two Small Caps the Government Won't Let Go Broke." Get instant access to this free report.
- Add Magic Software Enterprises to My Watchlist.
At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings. He is the 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 don't 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.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.