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 data storage specialist Mellanox Technologies
So what: Mellanox's first-quarter beat was so wide -- adjusted EPS of $0.51 versus the consensus of just $0.34 -- that a swarm of analysts are being forced to significantly raise their growth expectations. Revenue even soared 61% to a company record of $88.7 million, suggesting that the demand tailwinds working in Mellanox's favor are particularly strong right now.
Now what: Expect the operating momentum to continue. "Our strong quarterly revenue growth reflects the increased penetration of our high-performance InfiniBand and Ethernet interconnect solutions in new markets," said CEO Eyal Waldman. "The recent launch of Intel Romley- and Sandy Bridge-based server and storage platforms has created a significant industry upgrade and end-user demand for high-performance interconnects." With the stock shooting through its 52-week high and trading at a forward P/E of 35-ish, however, I'd wait for a much larger margin of safety before buying into that bullish talk.
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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Intel. Motley Fool newsletter services have recommended buying shares of Intel.Try any of our Foolish newsletter services free for 30 days.