DigitalGlobe Shares Plunged: What You Need to Know

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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 DigitalGlobe (NYS: DGI) have plunged today, down by as much as 15% after the company reported earnings yesterday.

So what: Revenue in the fourth quarter was $97.7 million, with earnings per share coming in at $0.10. The top line registered a healthy beat, but the bottom line fell $0.02 short of analysts' expectations.

Now what: On its surface, this looks like a classic overreaction to a minor miss on profit, and shares now stand at multiyear lows. CEO Jeffrey Tarr did have some cautious words: "We believe that a more restrictive government funding environment, while not desirable, will serve to highlight our competitive advantages." Jefferies is defending the stock by maintaining its buy rating, although it did lower its price target from $30 to $24, which still represents significant upside from current prices.

Interested in more info on DigitalGlobe? Add it to your watchlist byclicking here.

At the time this article was published Fool contributor Evan Niu holds no position in any company mentioned. Click here to see his holdings and a short bio. 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.

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