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Why InnerWorkings Inc.'s Shares Popped Briefly Today

By Travis Hoium - Feb 19, 2014 at 1:59PM

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Is this meaningful or just another movement?

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 print management company InnerWorkings (INWK) jumped as much as 12% briefly in early trading today after the company released mixed fourth-quarter results.

So what: Investors were happy with top-line results that grew 22% from a year ago to $245.6 million, above the $225 million estimate. The bottom line wasn't as impressive where the company lost $0.02 per share, a penny below estimates, and predicted $0.23-$0.27 per share in earnings for 2014, below the $0.29 estimate.  

Now what: Bottom-line results weren't significantly below estimates so the top-line performance got more attention than that miss. What concerns me is that InnerWorkings is still hovering just over breakeven over the past year and can't seem to gain a lot of traction on the bottom line. With shares trading at 30 times the top end of management's estimate, I think shares are just too expensive and would wait to see better bottom-line results.

Travis Hoium 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.

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