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 Revolution Lighting Technologies (NASDAQ:RVLT) shone bright last month to gain a solid 15%. That helped the stock reverse most of its loss for January, even pushing it into positive territory year to date.

So what: There wasn't a single order update from the LED lighting solutions company in February, nor was there any major industry-specific news to fuel optimism. But a business update was enough to push up shares by more than 20% during the second week and help the stock maintain momentum through the month.

On Feb. 10, Revolution updated the market on its forthcoming fourth-quarter numbers, slated for a mid-March release. Here's a quick recap of what the company expects:

  • Revolution slashed its fourth-quarter-revenue guidance to $7 million from the earlier projected $10 million, based on a delay in a "large international order."
  • The company still projects its fourth-quarter, pro forma revenue to double year over year. Pro forma is after adjusting for the impact of Revolution's acquisition of Seesmart Technologies in December 2012.
  • Revolution claimed to have an order pipeline worth $200 million "in actionable opportunities" for the next 12-18 months.
  • It expects to generate $50 million in revenue during fiscal 2014, with organic growth accounting for half of that; and projects to end 2014 with 35% gross margin.

That's a mixed bag, actually. While the lower revenue isn't great news, the expected growth on pro forma revenue looks good. But there's a catch: Revolution didn't file its fourth-quarter-earnings report last year, apparently because it was busy with the Seesmart acquisition which coincided with the company's fourth quarter. So we don't really have any numbers for comparison.

Now what: That said, even at $7 million revenue for the fourth quarter, Revolution will end 2013 with roughly $26 million in revenue. That's an astounding fivefold jump from 2012, thanks largely to the Seesmart acquisition. And the fact that it expects to nearly double revenue to $50 million this year shows how rapidly the company's order book is growing. Revolution now boasts some niche customers, such as New York's largest commercial property company, SL Green Realty, and the U.S. Navy. The company has also received orders from foreign markets such as Mexico.

But I'm waiting to see management get serious about controlling costs, as Revolution will likely end 2014 with substantial losses. It incurred a $7.3 million operating loss during the nine months ended Sept. 30, 2013, despite a near sixfold jump in revenue. Given the accelerating growth in Revolution's orders and revenue, and the huge growth potential that the global LED lighting business holds, I wouldn't be too worried about those losses if it weren't for the higher administrative expenses that are eating into the company's bottom line. While higher research and development costs aren't bad, the company lacks control over its operating expenses, which is a concern.

Revolution shares could move big in March if the company guides well for 2014. But I'd pay attention to how management plans to reduce costs, and to what strategies it has in mind to deepen the company's foothold in a highly fragmented and competitive industry. Until then, I'd suggest that prudent investors tread carefully.

Revolution Lighting may have a lumpy ride this year, but this stock could take off
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Neha Chamaria has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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