Why CSG Systems Shares Soared

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 CSG Systems International (Nasdaq: CSGS  ) climbed as much as 17% today as the support-services provider smashed earnings estimates and raised its guidance for the year.

So what: CSG beat earnings estimates by 20% or more for the third quarter in a row, earning an adjusted profit of $0.56 per share and bringing in $183.9 million in revenue, also above estimates. Other highlights included repurchasing 345,000 shares at an average cost of $15.76, and raising its full-year guidance to a non-GAAP EPS of $2.00-$2.15. The guidance was also adjusted to include the effects of its $19 million acquisition of the Swedish software company Ascade in July.

Now what: With a relatively low forward P/E of 9.8, and a track record of consistently beating the Street, this stock looks appealing. Analysts have yet to boost their estimates; they will likely do so, and for next year as well -- the 2013 consensus is just $1.99 right now. While revenue is not expected to grow rapidly, CSG's share buyback program should help boost investor returns.

Want to stay connected with CSG Systems? Add CSG Systems International to My Watchlist.

Fool contributor Jeremy Bowman holds no positions in the companies in this article. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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