Why Multimedia Games' 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 Multimedia Games (NASDAQ: MGAM  ) jumped as much as 22% today after the company reported earnings.

So what: In the fiscal first quarter, the company's revenue jumped 27.3% to $44.3 million, easily topping the $39.8 million mark Wall Street had set. On the bottom line, earnings per share hit $0.24, well above the $0.13 estimate.  

Now what: The company's TournEvent slot system is driving most of the momentum, with nearly half of the total units sold in the quarter. Management is confident that growth will continue as momentum builds around the world, and for investors this is an interesting growth story. I'd like to see a pullback before jumping in because the forward P/E ratio of 21 is a little high, but I think shares can move higher long-term on these strong results.

Interested in more info on Multimedia Games? Add it to your Watchlist by clicking here.


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