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 Ellie Mae (NYSE:ELLI) rose as much as 15% on Friday after the mortgage software provider topped Wall Street's expectations for fourth-quarter revenues and earnings per share (EPS) and, crucially, announced guidance for the first quarter and the full year that also exceeded consensus estimates. By 1 p.m., the stock had pulled back and was sitting at a roughly 6% gain from the previous day's close.

So what: It was "beats" across the board when Ellie Mae announced its fourth-quarter results and its outlook for the current quarter and 2015, as the table below illustrates:



Consensus Estimate

Q4 Revenues

$46.6 million

$41.7 million

Q4 Earnings per Share






Q1 Revenues

$46 million-$47 million

$43.22 million

Q1 Earnings per Share



2015 Revenues

$203 million-$206 million

$197.35 million

2015 Earnings per Share



*Adjusted. Source: Ellie Mae, Thomson Financial Network, Zacks.

Note that, with regard to guidance for the first quarter and the full-year 2015, the low end of the company's estimate range was in every case higher than the consensus estimate -- that is, on revenues, EBITDA (earnings before interest, taxes, depreciation and amortization -- not included in the table), and adjusted earnings per share.

With regard to the fourth quarter, the 53% year-over-year increase in revenues represents a huge rebound from the "growth trough" in the year-ago quarter (+1.5%) and the best quarterly growth figure in two years.

This is how newly installed CEO Jonathan Corr characterized that performance:

Revenue grew 53% over last year's fourth quarter to a record $46.6 million. We again outperformed the overall mortgage market as we continued to grow our active user base and increased average revenue per user by 32% over last year's fourth quarter. Our results demonstrate the upside leverage of our model as we benefited from an uptick in the volume of loan applications during the quarter.

Now what: I don't disagree with Corr that Ellie Mae is entering 2015 "well positioned to continue to grow market share and revenues." With the shares now valued at roughly 55 times the company's own high estimate of 2015 adjusted EPS (which doesn't deduct the cost of stock options, among other items), continued growth is imperative if the company is to reward investors with anything like the gains they have earned to date.