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What: Shares of Sapient (NASDAQ:SAPE) are up 16% today, after an impressive double beat on last night's third-quarter earnings. The company's fourth-quarter revenue outlook also came in higher than the analyst consensus.
So what: Sapient was expected to post revenue of $281.3 million and earnings per share of $0.13, but actual results were $299.3 in revenue and $0.20 in adjusted EPS. Suffice to say that this was more than analysts had been looking for. Fourth-quarter revenue guidance, with a $289 million to $294 million range, hits the consensus of $289 million at the low end, but this is slightly ($1 million to $2 million) less than the company had looked for, and was reduced due to the impact of Hurricane Sandy. The company also expects fourth-quarter non-GAAP operating margins to range from 14.3% to 15.3%, which hits this quarter's 14.7% right in the middle.
Now what: Sapient's P/E is still a reasonable 23.1 after the pop, and recent trailing 12-month free cash flow levels were running ahead of the company's net income, which make this a cheaper stock on a free cash flow basis. Although next quarter won't bring in the same level of revenue, Sapient's consistent progress in recent years earns it a closer look, at the very least.
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Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more news and insights. 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.