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 personal-finance website Bankrate
So what: It's a little hard to know what to do with investors' reaction to Bankrate's first-quarter numbers. For the quarter, revenue jumped 26% from the prior year, while net income doubled. On an adjusted basis, earnings per share climbed 38% year over year to $0.18. To be sure, that $0.18 tally missed analysts' estimates, but only by $0.01.
Now what: When a company's shares dive like this on earnings news, it's very often a matter of poor forward guidance. But Bankrate's full-year view shouldn't have shocked shareholders -- the projection of revenue growth "in the mid-20% range" and "EBITDA margins in the lower 30% range" was the same as what the company offered back in February. So what's the story, then? It could be simply that with shares currently -- that is, after today's drop -- trading at 24 times expected 2012 earnings, investors thought they needed a bigger, better quarter and perhaps a boost to full-year guidance.
In that light, there may be reason for some chagrin, but Bankrate's first quarter still looked pretty solid.
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