Why Voxx International Shares Tumbled

Is this meaningful? Or just another movement?

Jeremy Bowman
Jeremy Bowman
Jan 9, 2014 at 8:36PM

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 VOXX International (NASDAQ:VOXX) were getting tuned out today, falling 18% today after posting disappointing guidance in its third-quarter earnings report.

So what: The maker of automotive entertainment products actually beat earnings estimates with a profit of $0.63 against expectations of $0.50, but revenue came up short. Sales ticked up 1.1%, to $245.8 million, below estimates of $250.5 million. CEO Pat Lavelle said the results were "tracking in line" with expectations, and said that the lowered guidance is a result of exiting certain product categories. Still, he added that "everything is materializing as expected." Management dropped its full-year revenue projection to $825-$830 million, below analyst expectations of $840 million.

Now what: Despite the revenue miss and lowered sales guidance, Voxx said it sees net income growth of 3%-4% next year, roughly in line with expectations. Considering profits are still moving in the right direction, and CEO Lavelle's explanation for the reduced sales guidance is accurate, today's sell-off may be exaggerated. Voxx now trades at a P/E of just 11 and, with auto sales improving, the company stands to benefit. Now may be a smart time to buy.