Setting up targets and mowing them down isn't just a rewarding game at a shooting gallery. It's an approach that works pretty well with Mr. Market, too. Companies that topple profit projections are usually on to something -- and the pros don't know it just yet. Underestimated companies often wind up producing even more upside surprises in the future.

That said, let's take a closer look at a few of the companies that humbled the prognosticators this past week.

We'll start with Red Hat (NASDAQ:RHAT). The software company that is profiting on the back of the open-source Linux platform earned $0.09 a share on a 42% surge in revenue. Wall Street was expecting earnings to grow to just $0.07 per share after last year's $0.06 second-quarter showing.

Shares surged nearly 30% higher on the news -- and with good reason. The company is experiencing sequential improvement in the current quarter as more corporate customers take a shine to open-source solutions. This comes at a time when information technology spending is awakening from its cyclical slumber. Perfect timing for Red Hat. More nail biting for Microsoft (NASDAQ:MSFT), if the Linux migration continues.

Paychex (NASDAQ:PAYX) was another topper. The payroll specialist also saw its stock inch higher after delivering healthy fiscal first-quarter results. The company earned $0.30 a share, two pennies ahead of where analysts had pitched their prognosticating tent. Improving margins was the story here; the bottom line surged by 31% as revenues climbed just 17% higher. Paychex happens to be one of the best investments over the past 15 years. In 1990, one could have picked up shares of Paychex at a split-adjusted price of less than a quarter apiece.

Lennar (NYSE:LEN) is the third company that we'll be taking a closer look at this time. The homebuilder topped forecasts, but the cat was already out of the bag a week earlier when the company pre-announced that it would be speeding past the consensus profit target of $1.92 a share. The bottom-line average worked its way up to $1.98 per share in the days leading up to last week's announcement, but Lennar still clocked in at $2.04 a share.

Rising interest rates and the disturbing trend of interest-only mortgages has many investors sitting on the sidelines when it comes to buying into the homebuilders. They fear a bubble. They believe that real estate prices can't stay buoyant forever. It's why the developers are trading at such low multiples. In the meantime, companies like KB Home (NYSE:KBH) and Hovnanian (NYSE:HOV) joined Lennar in posting record results in September. The good times should continue in the near term, as Lennar closed out the period with healthy gains in new orders and is sitting on a significant backlog of new homesteads to be delivered. There have been some cracks in the sector. However, a lot of that pessimism is already priced into the homebuilder stocks.

So, keep watching the companies that lap expectations. Over time, it will be a rewarding experience for investors. That's the kind of surprise that market watchers relish in the Rule Breakers newsletter service. The strategy has paid off, as the average Rule Breaker selection has more than tripled the S&P 500's market return. Want in? Check out a 30-day trial subscription.

Either way, come back next Monday to learn about more stocks that blew the market away.

Longtime Fool contributor Rick Munarriz is a fan of toppers, but he does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.