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What: Shares of specialty-food producer Smart Balance
So what: It wasn't the second quarter that investors were worked up about at Smart Balance. Sales did manage to rise 29% from last year to $76 million, but that was still a bit short of analysts' expectations. Earnings per share (on an adjusted basis) fell to $0.05 from $0.07 last year, though they were in line with Wall Street's estimates.
The outlook, however, was another story. Looking ahead, the company said it now expects sales of between $360 million and $370 million for all of 2012, which is a substantial boost over its previous forecast and ahead of the $329 million Wall Street expected. For 2013, Smart Balance's management is looking for $440 million to $450 million in revenue, which is well beyond the current $350 million expectation from analysts.
Now what: As far as stocks go, the promise for Smart Balance is very much an "on the come" bet -- growth has been strong, but with investors valuing the company at around 40 times expected 2012 earnings, growth will have to continue to be strong to create a compelling return. Certainly, the company's 2012 forecast suggests that it's currently delivering that growth -- at the midpoint of the forecast range, the company would show 33% top-line growth for the full year.
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Fool contributor Matt Koppenheffer has no financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter, @KoppTheFool, or on Facebook. The Fool’s disclosure policy prefers dividends over a sharp stick in the eye.