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 Inteliquent (NASDAQ:IQNT) have gained nearly 13% today after the company released its fiscal first-quarter financials that showed a double beat of Wall Street analysts' revenue and EPS estimates.
So what: Inteliquent reported first quarter revenue of $56.2 million and net income of $9.2 million, which works out to earnings of $0.29 per share based on the company's current share count. Analysts had anticipated revenue of $50.6 million and $0.23 in EPS.
The company also updated its full-year guidance, which now projects revenue in a range of $210 million to $220 million -- well ahead of Wall Street's $203.7 million consensus -- and anticipates adjusted EBITDA to range from $68 million to $72 million. First-quarter adjusted EBITDA was $20.2 million, so if net income has a similar relationship to adjusted EBITDA for the full year, we can project a (very) rough net income guidance range of $31 million to $32.8 million, or $0.96 to $1.02 in EPS. That guidance range also comes in well above Wall Street's consensus estimate of $0.90 in EPS for the year.
Now what: Inteliquent shareholders have enjoyed a monster surge since early 2013, as shares have already gained nearly 700% over the past 16 months. But it's worth noting that the company remains incredibly inexpensive on both a P/E and a price-to-free-cash-flow basis, as its P/E is only 9 and its P/FCF ratio is just 11. Looking ahead, this sort of guidance would moderate the company's P/E quite a bit, to a more reasonable 15.7, but that's hardly nosebleed territory, either.
One thing investors need to watch is the company's difficulty improving its top line, which finished at $222 million for 2013 -- and that figure was 17% smaller than its annual revenue for 2011. Inteliquent is a very intriguing stock, and it's certainly worth digging into, but investors should do their homework before jumping in.
Alex Planes 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.