Why WebMD Shares Spiked

Before you go, we thought you'd like these...
Before you go close icon

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 health website operator WebMD soared a whopping 25% today after its quarterly results and guidance topped Wall Street expectations.

So what: The stock was crushed in 2012 as weak ad spending and increased competition pressured results, but a wide fourth-quarter revenue beat -- $132.7 million versus the consensus of $124.1 million -- coupled with positive full-year guidance suggests that things are turning. In fact, total traffic to its websites rose 20%, while unique users per month surged 28%, giving Wall Street plenty of good vibes over its growth prospects going forward.


Now what: For 2013, management now sees a loss of $0.13-$0.45 per share on revenue of $430 million-$455 million, well ahead of the consensus loss of $0.44 per share and a top line of $422 million. "We enter 2013 as a more nimble organization that is well positioned to meet the needs of our users and clients in a dynamic and demanding marketplace," said CEO Cavan Redmond. But while its short-term prospects are certainly looking better, WebMD's still-shaky competitive position continues to make the stock a questionable long-term opportunity.

Interested in more info on WebMD? Add it to your watchlist.

2013 and beyond
The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in the brand-new free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.

The article Why WebMD Shares Spiked originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners