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 Medidata Solutions (MDSO), a developer of cloud-based software used in clinical research for the life sciences industry, dipped as much as 11% after reporting its fourth quarter results before the opening bell.

So what: For the quarter, Medidata reported a 27% increase in revenue to $74.6 million as adjusted EPS improved 37% to 0.23 per share. By comparison, Wall Street was looking for $73.9 million in revenue on $0.18 in EPS. Furthermore, the company's subscription backlog grew 23% to $228 million as 100% of large enterprise customers renewed their business with Medidata. Looking ahead, Medidata is projecting fiscal 2014 full-year revenue of $340 million-$345 million on adjusted net income of $41 million-$44 million, or $0.74-$0.79 per share. The Street, on the other hand, expected EPS to hit $0.83 in 2014 on revenue of $339 million.

Now what: While the fiscal 2014 EPS miss itself isn't all that bad with regard to severity, the simple fact that the company is trading at 70 times the midpoint of its offered guidance proved more than enough to clobber Medidata today. On one hand, Medidata's recurring contracts, impressive client retention, and the growing need for clinical research software to improve efficiency and reduce costs makes the company incredibly attractive. On the other hand, its valuation has always been an eyesore, and investors expect constant EPS beats if it's going to maintain this type of premium over its peers. I would suggest continuing to watch Medidata safely from the sidelines until we see a sizable pullback (i.e., much more than we've witnessed today).