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 Aeroflex Holding Corp (NYSE: ARX) are up 16% today, after beating expectations on both top and bottom lines. The company's forward guidance, while not ahead of estimates, was also good enough to attract serious investor attention today.

So what: Aeroflex's quarterly results were $141.2 million in revenue and adjusted EPS of $0.04, which both beat the Street's consensus of $137.2 million in revenue and $0.01 in EPS. The company offered forward revenue guidance for its upcoming fiscal second quarter in the $147 million to $155 million range, with the midpoint right about at the $151 million consensus. EPS guidance, in the $0.06 to $0.09 range, also covered consensus estimates of $0.08.

Now what: Aeroflex's positive quarter and solid guidance prompted Needham & Company to upgrade the stock from a hold to a buy. The company's upcoming guidance hints at a turnaround in declining revenue, and Aeroflex's free cash flow had already been nudging higher, even before today's good news. On a price-to-free-cash-flow level (using the most recently available trailing 12-month result), Aeroflex is quite cheap, with a P/FCF ratio in single digits. Needham & Company might be onto something. Aeroflex looks like it has earned a closer look.

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