Q: Your comments on Knight's first quarter results?
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5i Research Answer:
EPS of ($0.04) beat estimates of ($0.0451) and revenues of $82.6M beat estimates of $74.98M. Sales grew by 29%, and its gross margins contracted slightly from 51% in the prior year to 49%. Its Adjusted EBITDA grew by 37%, and the company purchased ~2.2M shares in the quarter. The company was able to expand its Adjusted EBITDA margins as it managed its operating expenses well and leveraged its high sales growth rate. It has been mostly using its free cash flows to repurchase shares, and the stock remains at a good valuation, but the company may struggle to get a great valuation in the market and for now its momentum has been fairly muted.