Source: Sonus.

What: Shares of Sonus Networks (RBBN -0.39%) soared more than 20% higher on Tuesday morning, at one point reaching as high as 26.5%. The maker of telephony networking equipment for large telecom and cable systems reported fourth-quarter results in the early morning hours, easily surpassing Wall Street's estimates.

So what: In the fourth quarter, Sonus' revenues fell 0.7% year over year to land at $76.3 million. Adjusted earnings rose 53% higher, stopping at $0.23 per diluted share.

Analysts would have settled for earnings of $0.20 per share on sales near $73.9 million. These estimates were in line with management's official guidance targets.

Sonus also set fresh guidance targets for the 2016 fiscal year at roughly $260 million in top-line revenues and adjusted earnings near $0.24 per share. Both of these goals sit shoulder to shoulder with Wall Street's consensus estimates.

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.

Now what: Even after this sudden jump, Sonus shares are still trading some 62% below their year-ago prices. You may recall the company slashing first-quarter estimates and reducing full-year targets in March 2015, sending Sonus shares right through the floorboards.

At the time, CEO Ray Dolan promised to deliver positive cash flows for the full year anyhow, thanks to careful cost-cutting moves. Further, Dolan later pointed out that the revenue shortfalls came from four major customers reducing their Sonus orders to "a fraction of what we had forecast."

So here we are at the end of the 2015 fiscal year, and Sonus did indeed come through with positive free cash flows for the full year. The company had no customers representing more than 10% of this quarter's total sales, relying instead on "a high volume of orders from a diverse set of customers," in Dolan's words.

The company's quarterly sales fell off a cliff last year but have now climbed right back to the diving board again. Here's how the quarterly sales results had stacked up leading into this report, which rose right back to the $76 million level:

SONS Revenue (Quarterly) Chart

SONS Revenue (Quarterly) data by YCharts

The company has done a lot of the hard work required to rebuild a cracked revenue foundation, and can now focus on delivering future growth instead. The new, more cost-effective operating structure will stay in place while Sonus looks to add higher sales volumes on top.

That looks like a solid business plan, especially since the company now has recent proof of managing through a difficult period. Meanwhile, investors remain nervous and stock prices are still low. Sonus' P/E ratio now stands at 29 times forward earnings, but the bottom line is primed for improvements and the stock also trades just above book value.

I've made money on Sonus in the past, and the stock is starting to look attractive again. At the very least, Sonus deserves a place in your CAPS portfolio, where you can keep track of the stock without risking any real money.