Why Everyday Health Inc Shares Feel Great Today

Is Everyday Health's jump meaningful? Or just another movement?

May 13, 2014 at 12:32PM

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 Everyday Health Inc (NYSE:EVDY) jumped 15% Tuesday after the newly public digital health and wellness company released better-than-expected first-quarter results.

So what: Quarterly revenue rose 23% year over year to $37.5 million, which translated to an adjusted pro forma net loss of $0.08 per share. Analysts, on average, were expecting a wider $0.16 per share loss of lower sales of $36.5 million. Meanwhile, adjusted earnings before interest, taxes, depreciation, and amortization came in at $3.2 million.

For the current quarter, Everyday Health sees revenue of $40.5 million to $41 million, with adjusted EBITDA of $6.5 million to $6.7 million. By comparison, analysts' models called for Q2 revenue of $40.3 million.

Finally, for the full year, Everyday Health projects sales of $179.3 million to $180.3 million, with adjusted EBITDA of $34 million to $34.5 million. Analysts were looking for 2014 sales of just $177.2 million.

Now what: Everyday Health co-founder and CEO Ben Wolin added, "As we continue to innovate and the health care industry continues to evolve, we will be well-positioned to pursue opportunities to influence health outcomes and the cost of care for payors, providers, and employers."

Today's results were solid by any measure, and it's encouraging to see Everyday Health steadily moving toward sustained profitability. With shares trading at a reasonable 18 times next year's estimated earnings -- and keeping in mind those estimates are likely to drift higher once analysts have time to digest today's news -- I think the stock should be able to reward long-term investors from here.

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Steve Symington 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.

4 in 5 Americans Are Ignoring Buffett's Warning

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Jun 12, 2015 at 5:01PM

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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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