Why Constant Contact Shares Popped

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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 digital marketing company Constant Contact climbed 10% today after its quarterly results and outlook topped Wall Street expectations. 

So what: The stock has been on fire over the past three months on signs of improving demand, and today's second-quarter results -- EPS of $0.12 beat Wall Street by $0.02 while revenue jumped 13% -- coupled with upbeat full-year guidance only reinforce those positive growth vibes. In fact, adjusted operating margins during the quarter expanded 60 basis points over the year-ago period, suggesting that Constant Contact's competitive position strengthening, as well.  

Now what: Management now sees adjusted EPS of $0.68-$0.73 on revenue of $285 million-$288 million, up from its prior view of $0.66-$0.71 and revenue of $284 million-$289 million. "I am pleased with the performance of our core business and excited about our progress toward delivering a robust suite of integrated online marketing tools for small businesses," said CEO Gail Goodman. Of course, with the stock now up about 35% over the past three months alone and trading at a 20-plus forward P/E, I'd wait for some of the excitement to fade before buying into that bullishness.

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The article Why Constant Contact Shares Popped 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.

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