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 Cardtronics (NASDAQ:CATM) are trading nearly 6% higher this afternoon following an opening-bell pop that sent the stock surging by almost 12%. Investors have piled in today in response to the ATM provider's better-than-expected earnings report after Wednesday's closing bell.
So what: Cardtronics reported $283.9 million in revenue and $0.64 per share in adjusted earnings for the fourth quarter, which represented improvements of 17% and 31%, respectively, over the year-ago quarter's result. These figures handily beat Wall Street's expectations for $270.6 million in revenue and $0.57 in adjusted EPS. The company expects to earn between $2.74 and $2.83 per share in adjusted earnings, on revenue ranging from $1.17 billion to $1.2 billion, for 2015. This guidance compares favorably, particularly on the bottom line, to Wall Street's expectations for $1.17 billion in revenue and $2.70 in adjusted EPS.
Now what: As an ATM operator, Cardtronics must contend with currency exchange rates that have been a bit wobbly in recent months due to a number of macroeconomic factors. The company's shares are also not cheap on a generally accepted accounting principles basis, with a current P/E ratio of 44. However, Cardtronics' trailing 12-month price-to-free cash flow ratio is a much more reasonable 23.8, even after today's pop, and the midpoint of its 2015 EPS guidance suggests an adjusted P/E of just 13.7, which is extremely reasonable in light of its anticipated 42% to 46.6% adjusted EPS growth rate over the coming year. This was a good report in many ways, and Cardtronics certainly appears worth watching, or possibly even nibbling on, at its current level.