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 car dealership software specialist DealerTrack Holdings (Nasdaq: TRAK) soared 23% Tuesday after its quarterly results and full-year outlook breezed past Wall Street estimates.

So what: Driven by a 36% spike in revenue, DealerTrack swung to an adjusted first-quarter profit of $7.5 million, or $0.18 per share, while analysts were expecting earnings of just $0.11 per share. Rebounding auto demand and a steadily improving credit environment has helped buoy the company's results in recent quarters, and with the shares blowing past 52-week highs today, investors seem confident that the trend will continue.

Now what: I'd be cautious about riding DealerTrack's recent surge of momentum. While management's full-year earnings outlook of between $0.56 and $0.62 also blew out Wall Street, much of that optimism already seems baked well into the price. With the shares now up more than 70% since September, and trading at roughly 45 times the midpoint of management's guidance, I'd wait for Mr. Market to be a little less gaga over DealerTrack before jumping in.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

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