Why Home Inns & Hotels Management's Shares Popped

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 Home Inns & Hotels Management (NAS: HMIN) jumped as much as 10% in trading today after the company released earnings.

So what: Revenue increased 66% from a year ago to $199.4 million, and the company reported a net loss of $14.8 million, or $0.18 per share. Analysts had expected revenue of $183.6 million and a loss of $0.03 per share.

Now what: Revenue growth was impressive, but I'm more worried about the loss on the bottom line. EBITDA was also down significantly from a year ago, so the company isn't squeezing as much out of the business as it used to. Analysts expect the bottom line to turn around quickly and for the company to post $1.04 per share in earnings during 2012, but I'd like to see some bottom-line results before buying into this growth story.

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At the time this article was published Fool contributor Travis Hoium has no position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools don't 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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