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 Parametric Technology (Nasdaq: PMTC) plummeted 20% on Thursday after the product-design software specialist slashed its second-quarter outlook.

So what: Parametric's shares have soared in 2012 on blowout earnings, but today's warning is forcing Mr. Market to sober up quickly. Management cited its failure to close a large European contract and weaker-than-expected North American sales for the cut, suggesting that Parametric has far more headwinds working against it than investors had thought.

Now what: Management now sees second-quarter adjusted EPS of $0.26 to $0.28 on revenue of $300 million, down from a prior view of $0.32 to $0.36 on a top line of $305 million to $320 million. "While we are disappointed with our Q2 results, we are strategically positioned in attractive growth markets and remain confident in our ability to drive long-term growth and profitability," said CEO James Heppelmann. With the stock still up more than 50% from its early October lows and trading at a plus-25 P/E, however, I'd wait for even more of a pullback before jumping in.  

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