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: What do you get when you combine a 25% bump in quarterly profit with an analyst endorsement to buy that bump? (Nasdaq: NTES) investors get a 13.5% one-day profit on their stock -- that's about the amount NetEase jumped at today's market open.

So what: NetEase reported a 31% rise in revenues and gross profits for its fiscal fourth quarter, which, even after accounting for higher operating expenses, left the stock earning 24% more in fiscal Q4 2010 than it had earned the year previous. Most of the gains came in response to NetEase's release of the Wrath of the Lich King expansion pack for players of Activision Blizzard's (NYSE: ATVI) World of Warcraft, but NetEase also benefitted from "outstanding performances" by its slate of self-developed online games.

Now what: At the time of this writing, the stock's already given back half its early morning gains. At its current price, NetEase costs just 17.4 times earnings, which seems pretty reasonable in light of the 16% long-term earnings growth Wall Street predicts for the company. And when you consider the size of today's earnings beat (and the potential for NetEase to grow faster than predicted) or the fact that the $387 million in free cash flow that the company produced exceeds reported net income by 15%, that "reasonable" price starts to look downright cheap.

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Fool contributor Rich Smith owns shares of Activision Blizzard. is a Motley Fool Rule Breakers pick. Activision Blizzard is a Motley Fool Stock Advisor recommendation. Motley Fool Options has recommended a synthetic long position on Activision Blizzard. The Fool owns shares of Activision Blizzard. The Motley Fool has a disclosure policy.

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