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 network management software maker OPNET Technologies
So what: OPNET was doling out disappointments by the bushel last night with profits for the third quarter coming in at $0.26 on revenue of $46 million. This compares to the Street's consensus estimate of $0.29 and $46.4 million. Just for safe-keeping, OPNET's fourth-quarter guidance also seemed light -- EPS is expected to be in the range of $0.20-$0.32 versus the current estimate for $0.30, with sales of $45 million-$49 million versus Wall Street's $48.1 million.
Now what: OPNET really doesn't have much excuse for the weak results. Peers CA Technologies and NetScout Systems both surpassed Wall Street's estimates in their recently reported quarters and they've been dealing with the same economic conditions as OPNET. Even after today's drop, OPNET is still too pricey at 25 times forward earnings and more than six times book value. I'd gladly pass here in favor of its peers.
Craving more input? Start by adding OPNET Technologies to your free and personalized watchlist so you can keep track of the latest news with the company.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong. Motley Fool newsletter services have recommended buying shares of Stratasys. Try any of our Foolish newsletter services free for 30 days. 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.