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 Lionbridge Technologies (NASDAQ:LIOX) have gained nearly 13% today after the company came through with a third-quarter earnings report that gives investors a lot to like.
So what: Lionbridge's quarterly revenue, $124.6 million, is an 11% year-over-year improvement, and comes in ahead of Wall Street's modest expectations of $119 million. The company's earnings of $0.08 per share -- on a generally accepted accounting principles basis, no less -- smashed through expectations of just $0.03 in EPS. Going forward, Lionbridge expects revenue to be from $120 million-$123 million for the fourth quarter, which is better than the $119.5 million Wall Street consensus. The company also revealed guidance for 2014 -- it expects revenue to grow by 5% -10% from 2013, and income from operations to see "significant growth."
Now what: This is certainly good news. However, at present, the company is valued like a relatively high-growth stock (its P/E is roughly 34), but it anticipates revenue growth that's more akin to that of a fully established large-cap company. Margin expansion could juice earnings growth and make today's P/E irrelevant, but this stock deserves a cautious, close look before you make any investment.
Want more news and updates? Add Lionbridge to your Watchlist now.
Fool contributor Alex Planes has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
More from The Motley Fool
The Greatest Small-Cap Stocks You've Never Heard About
Some of the market's best stocks could be flying under the radar of Wall Street and investors.
4 Top Stocks Under $5
These small stocks could have a big impact on your portfolio.
3 Small-Cap Value Stocks to Power Your Portfolio
With PEG ratios well below one, these small-cap value stocks could be screaming buys.