Why OraSure Technologies, Inc. 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 OraSure Technologies, (NASDAQ: OSUR  ) have gained 10% today after the diagnostics and fluid-collection products company delivered a strong earnings report.

So what: OraSure's fourth quarter came in with revenue of $28.8 million, a 30% year-over-year improvement and slightly better than Wall Street's $27.1 million consensus. The company's adjusted earnings of $0.11 per share stomped all over the consensus estimate, which called for a loss of $0.05 per share.

However, OraSure now expects revenue to range from $23 million to $23.5 million, which will produce a loss of between $0.14 and $0.13, for the first quarter of 2014. The company's top-line guidance is slightly better than Wall Street's $22.7 million consensus, but its EPS guidance is worse than the $0.10 loss per share analysts had been looking for. Still, the report was good enough on balance to make investors optimistic about the future.

Now what: Today's pop puts OraSure back at levels it last touched a year ago -- it's been a wasted year for OraSure investors so far. However, today's report puts the company a lot closer to breakeven than it was for much of 2013, and its free cash flow is nudging even closer to the black than its GAAP bottom line. Of course, OraSure has no real history of profitability, so it remains a bit speculative, and its drug-testing business may take a big hit from the wave of marijuana legalization efforts sweeping the country. I'd be very cautious around this stock.

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

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