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 AVG Technologies NV (NYSE: AVG) popped more than 13% Thursday after the online security specialist reported better-than-expected fourth-quarter results.
So what: Quarterly revenue increased 7% year over year to $101.9 million, including a 25% increase in subscription revenue, to $67.3 million. This, in turn, translated to adjusted net income of $0.52 per diluted share. Analysts were only looking for earnings of $0.41 per share on sales of $95.22 million.
In addition, AVG provided a "broad revenue outlook" for 2014 in the range of $365 to $405 million, with adjusted earnings per diluted share of $1.80 to $2.10. Analysts, on average, were modeling 2014 earnings of $1.92 per share on sales of $394.31 million.
Now what: Taking the midpoint of AVG's guidance -- and even despite AVG's modest top-line growth -- the stock looks pretty attractive trading around 10 times this year's expected earnings. Assuming AVG can continue controlling costs to maximize its bottom line, I think the stock has what it takes to reward investors over the long term.
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