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 SouFun Holdings Ltd. (SFUN) fell nearly 10% Wednesday after the Chinese real estate Internet portal announced mixed first-quarter results and weaker-than-expected guidance.
So what: Quarterly revenue rose 33.2% year over year to $121.2 million, which translated to a 44% increase in adjusted net income to $47.8 million, or $0.11 per share. Analysts, on average, were expecting lower earnings of $0.09 per share on higher sales of $124.47 million.
For the full year 2014, SouFun sees total revenue between $780 million and $796 million, good for an increase of 22.5% to 25% over last year. By contrast, analysts were modeling significantly higher 2014 revenue of $816.29 million.
Now what: Despite SouFun's disappointing 2014 revenue guidance, it looks like much of the market's pessimism is already priced in; shares have fallen 36% year to date and now trade around 10 times next year's estimated earnings. Even if those estimates fall slightly as analysts have time to fully digest today's news, I think SouFun stock could prove a bargain for patient, long-term investors.
