Why Responsys Shares Roared

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: After starting the day with a 13% pop, shares of Responsys (UNKNOWN: MKTG.DL  ) have settled into a gain of about 7%. Investors seem willing to overlook a rather mixed combination of earnings report and forward guidance, and are focusing on the positive today.

So what: Responsys reported second-quarter revenue that rose 25% year over year to $49.5 million, ahead of the $46.2 million consensus. On the other hand, the company's reported earnings of $0.02 per share only met expectations. Looking ahead, Responsys now expects revenue in the $47 million to $48.5 million range and earnings of approximately $0.02 per share for the third quarter. As with the current report, this guidance beats the top-line estimate ($46.8 million), but falls short of the EPS estimate ($0.04).

Responsys' full-year guidance is likewise an outperformer on the top line and an underperformer on the bottom line. The company upgraded its revenue guidance to the $195 million to $198 million range, above Wall Street's $192.1 million consensus, but lowered its EPS target to $0.15, $0.03 lower than both its prior guidance and Wall Street's expectations.

Now what: Responsys has now gained 50% in the past year and nearly 170% since the start of 2013. Investors don't seem to care that the company's profitability is less assured than it was before this report. Should you care? I'd dig a little deeper, but I'm not sure what numbers exist to support this near-term optimism. An adjusted forward P/E that remains in triple-digit territory isn't exactly flashing the "buy" signal.

Want more news and updates? Add Responsys to your Watchlist now.

Wall Street has been getting rich on trading-floor tips for decades -- and for decades, those tips have been "for industry insiders only." But not anymore. Our top technology analyst recently infiltrated one of the finance world's most exclusive gatherings... and left with three incredible investment opportunities, straight from the CEOs. These are profit-building strategies Main Street isn't meant to hear about -- so act now before someone shuts us up. Click if you want "industry insider" earnings -- NOW!

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2581814, ~/Articles/ArticleHandler.aspx, 8/26/2016 2:51:52 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 5 hours ago Sponsored by:
DOW 18,448.41 -33.07 -0.18%
S&P 500 2,172.47 -2.97 -0.14%
NASD 5,212.20 -5.49 -0.11%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
MKTG.DL $0.00 Down +0.00 +0.00%