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Why Liquidity Services Shares Surged

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of online auctioneer Liquidity Services (Nasdaq: LQDT  ) jumped 11% Thursday after its quarterly results and guidance breezed past Wall Street expectations.

So what: Liquidity Services' wide second-quarter earnings beat -- adjusted EPS of $0.52 versus the consensus of just $0.37 -- confirms investor confidence in the strong tailwinds working in the company's favor. In fact, gross merchandise volume spiked an impressive 59% in the quarter, giving analysts plenty of good vibes about its growth prospects going forward.  

Now what: Management now sees third-quarter adjusted EPS of $0.43-$0.46, also well above Wall Street's view of $0.39. "By continuing to invest in growing our e-commerce business we intend to capture a significant share of large, highly fragmented markets, both in the commercial and public sector," said Chairman and CEO Bill Angrick. Of course, with the stock hitting an all-time high on today's report -- up a whopping 225% over the past year -- and trading at a forward P/E of 35, Fools might want to wait for a pullback before buying into that bullishness.

Interested in more info on Liquidity Services? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Liquidity Services. 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 Fool's disclosure policy always gets a perfect score.

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