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 optical networking technologist Infinera Corp. (NASDAQ:INFN) soared 20% today after its quarterly results impressed Wall Street.
So what: The stock has plunged in recent months on concerns over Infinera's weakening bottom line, but today's Q4 results -- breakeven EPS versus a loss of $0.05 in the year-ago period -- suggest that things are starting to turn. In fact, revenue for the quarter increased a solid 8.6% over the year-ago period, reigniting analyst optimism over the growth potential of Infinera's next-generation platform, DTN-X.
Now what: Don't expect the turnaround momentum to slow anytime soon. "As we look ahead, we believe the opportunity for the DTN-X remains wide open with the 100G cycle still in its early stages," noted CEO Tom Fallon. "For 2014, we plan to continue our focus on winning new deployments and gaining market share, while driving enhanced profitability, and we remain optimistic about our outlook over the short, intermediate and long-term." More important, with Infinera shares still off 30% from their 52-week highs and trading at a clear price-to-sales discount to the sector, there seems to be plenty of room left to buy into that optimism.