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 Rally Software Development Corp (UNKNOWN:RALY.DL) fell 10% Friday after the company turned in solid fourth-quarter results, but followed with weaker-than-expected forward guidance.

So what: Quarterly revenue rose 27% year over year, to $19.6 million, which translated to an adjusted net loss of $0.19 per share. By comparison, Rally Software posted a loss of $1.68 per share in the same year-ago period. Analysts, on average, were looking for a wider fourth-quarter loss of $0.26 per share on lower sales of $19.25 million.

However, Rally expects first-quarter revenue in the range of $19.4 million to $19.6 million, or a deceleration to 21% to 22% growth over the same period last year. That should result in an adjusted net loss of $0.53 to $0.50 per share. Both figures arrived significantly below analysts' expectations for an adjusted loss of $0.20 per share on sales of $20.85 million.

What's more, Rally see full-year sales in the range of $91.5 million to $93.5 million, with an adjusted loss per share of $1.61 to $1.56. Analysts were modeling a full-year loss of $0.74 per share on sales of $92.11 million.

Now what: When asked about the discrepancy between their earnings guidance and Wall Street's models, Rally Software CEO Tim Miller pointed to "measured investments in R&D," and growing head counts for sales and marketing by 39%. That's all well and good, but the fact remains that the market was significantly underestimating Rally's near-term losses.

As a result, I'm sticking by my previous stance of patiently watching from the sidelines until Rally shows more signs of slowing cash burn and maintaining top-line growth.