Why Electronics For Imaging Shares Shot Up

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 Electronics for Imaging (NASDAQ: EFII  ) were shining brighter today, rising as much as 17% after topping estimates in its quarterly report.

So what: The print-equipment maker posted an adjusted $0.42 EPS profit, ahead of expectations of $0.36, and its revenue of $174 million beat estimates as well, despite only growing 7%. CEO Guy Gecht credited "tremendous execution and commitment by our team" and pointed to growth opportunities in 2013.

Now what: Beating estimates is always a promising sign, but the bar seems pretty low in this case. At a P/E of 28, EFI will need to grow sales by a faster pace than 7% in the future. The digital imaging industry seems to have potential, and EFI is considered in industry leader, so sustained growth should be achievable. Keep an eye on top-line increases going forward, as analysts are expecting a 6.6% jump in 2013. As long as the digital specialist can top that, shares should move higher.

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