The market tends to look forward when pricing companies, rather than gazing into the rearview mirror of reported results. For example, e-commerce provider Digital River (NASDAQ:DRIV) plunged 19% in after-hours trading on the basis of its 2006 outlook rather than on the record revenues and earnings it reported.

For the third quarter of 2005, Digital River reported $53 million in revenues, up 35% over last year. GAAP earnings were up 41% to $0.31 per share. On a pro forma basis, Digital River's earnings were up 72% from last year. While the company recorded some depreciation and tax benefits that boosted results a bit this quarter, it also said its overseas expansion was growing and expressed hope that it will one day surpass 60% of total revenues. The company also forecast that the fourth quarter would match expectations: Full-year revenues would be $216 million, a 40% increase over 2004's results.

Those were outstanding numbers, indeed, and if the market simply looked at how companies did in the past, Digital River's stock would undoubtedly have soared 19% rather than falling by that amount. But management sounded a cautionary note regarding 2006, and the market reacted accordingly -- or overreacted.

Antivirus software maker Symantec (NASDAQ:SYMC) accounts for 38% of Digital River's revenues, a sizeable portion that puts it at risk of fluctuations in its customer's business. The greatest risk to Symantec is Microsoft (NASDAQ:MSFT) moving into the security software market, something that has been expected since the software giant acquired SybariSoftware earlier this year. While Digital River and Microsoft have their own partnership agreements in other areas, Mr. Softy's move into antivirus protection -- while ironic, considering its software is responsible for the greatest number of security breaches -- could impact pricing by security software competitors, including Symantec, McAfee (NYSE:MFE), and Trend Micro (NASDAQ:TMIC).

For me, the after-hours sell-off was overwrought. Although analysts were contemplating earnings of $2.39 a share on revenues of $260 million next year, Digital River's lower guidance of $1.44 per share simply reflects management's conservative nature. For example, when the company gave 2005 guidance back in the third quarter of 2004, it anticipated revenues of only $188 million for the year. Digital River will exceed those estimates by 15% should 2005 play out as anticipated. To my thinking, that's a sign of responsible leadership: under-promise, over-deliver.

With the market continuing to punish Digital River during regular trading hours and the stock being offered below $28 a share, I view this as an exceptional opportunity to scoop up more shares, as might the company. It has an authorized share-buyback program of up to $50 million, of which only $3 million was exercised in the second quarter; it did not buy back any shares in the third quarter.

While the market may be looking ahead in pricing Digital River today, I'm looking even further ahead, and I see clear sailing for this leading e-commerce provider.

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Fool contributor Rich Duprey owns shares of Digital River but does not own any of the other stocks mentioned in this article. The Motley Fool has an ironclad disclosure policy.