Why MedAssets' Shares Popped

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 health-care-service company servicer MedAssets (Nasdaq: MDAS  ) were looking pretty darn healthy today, rising as much as 13% in intraday trading after the company reported first-quarter results.

So what: For the quarter, revenue climbed nearly 15% to $150 million, primarily on the strength of 17.6% growth in the company's spend and clinical resource management division. Wall Street analysts had been expecting the company to report sales of $142 million. On the bottom line the company reported a net loss, but, after adjusting for items such as big, acquisition-related expenses, it showed an adjusted profit per share of $0.24. That was up 41% from a year ago and better than the $0.18 that analysts were expecting.

Now what: Could the report have been better? Sure. Investors like it even more when a company not only beats current-quarter estimates but also raises full-year guidance above future estimates. In MedAssets' case, the company's guidance was essentially in line with analysts' expectations for fiscal 2012, if not just a bit light.

But for right now, a good-looking first quarter and a solid outlook for the full year appears to be enough to get investors jazzed about MedAssets.

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Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.

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12/31/1969 7:00 PM
MDAS.DL $0.00 Down +0.00 +0.00%
MedAssets CAPS Rating: No stars