Why Multimedia Games' Shares Jumped

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 15% in early trading after the company reported earnings.

So what: The company reported a 19% increase in revenue to $48.1 million and net income rose from $7.2 million a year ago to $8.4 million, or $0.28 per share. Analysts were only expecting $47 million in revenue and $0.24 per share in earnings, and the company beat that handily.  

Now what: The multimedia gaming industry is growing rapidly and Multimedia Games is finding more opportunities nationwide. The stock isn't cheap at 32 times trailing earnings, but if this level of growth can continue, it can continue its rise. I'd like to see a pullback before jumping in, but today's report was a positive nonetheless.

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


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