What: Education software company Rosetta Stone Inc (NYSE:RST) stock shot up again on Nov. 6, gaining roughly 8% on the day. That puts Rosetta Stone shares up some 13% over the past two market days. 

So what: Rosetta Stone released its third-quarter financial results after market close on Nov. 4, and based on the past two days of trading, it seems that the market is -- at least for now -- buying into management's turnaround efforts. 

While revenue fell 23% in the quarter, led by a huge 42% decline in the company's flagship Rosetta Stone foreign language software for consumers, revenue increased 12% in the Enterprise and Education -- or E&E -- segment, where the company is focusing its efforts on growth. And while the company still reported a net loss based on GAAP accounting, the loss was significantly lower than in last year's quarter, a trend of moving closer to profitability since the company began substantial cost-cutting earlier this year. 

There was some evidence that those cost cuts are paying off. Despite the big drop in consumer sales, contributing margin jumped 59% to 27% in that segment, as the company finds the balance between consistent sales and profitability. 

The company's clear focus right now is growing E&E business, and that seems to be happening. Not only were sales up 12% in the category, but bookings -- contracted future revenues -- increased more than 20% as well. 

Management said on the earnings call that the company generated $5.2 million in free cash flow in the quarter, and ended the period with about $4 million more cash than it had to start the period, and still carries no debt. 

Now what: The company looks to have made substantial progress, but there's still work to do. The jump in the stock over the past few days is nice, but frankly there's no telling whether it will be sustained in the short term or not. 

In other words, don't count on momentum if you are a Rosetta Stone investor, because Mr. Market is fickle at the best of times, and there are still questions about the turnaround at Rosetta Stone, and the company still doesn't have a permanent CEO in place. It looks like the company's made a good start, but there remains uncertainty. And that means more volatility is likely in the days, weeks, and months ahead. 

Jason Hall has no position in any stocks mentioned. The Motley Fool recommends Rosetta Stone. 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.