January 31, 2013
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 Virtusa (NASDAQ: VRTU ) are resting comfortably on a 6% gain this afternoon, after rising nearly 10% in morning trading behind a solid earnings report.
So what: Virtusa reported $86.5 million in third-quarter revenue with $0.29 in adjusted earnings per share. Both numbers squeaked ahead of analyst expectations, which sought $85.6 million on the top line and $0.28 in EPS. For the upcoming quarter, Virtusa expects $88.8 million to $90.8 million on the top line and $0.30 to $0.32 in EPS. Both numbers are roughly in line with what analysts sought, though the high end of Virtusa's revenue guidance exceeds the $88.8 million consensus. For the full fiscal year, Virtusa's EPS guidance of $1.05 to $1.07 hits the consensus on the top end and exceeds the consensus $331.0 million with an estimated range of $332 million to $334 million
Now what: Virtusa's been moving higher for years now, and so has its EPS. However, this latest pop puts the stock near its 52-week high, and its P/E has been trending higher for months. Investors may want to consider whether the company's expected growth rate will keep it moving in the right direction, or if a short-term pullback is in store for better values.
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