Why Sapient Shares Plunged
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 Sapient have plunged today by as much as 13% after the company reported earnings.
So what: Service revenue in the quarter came in at $293.2 million, which resulted in non-GAAP earnings per share of $0.20. Both top- and bottom-line results were ahead of analyst estimates, but they clearly weren't good enough for investors. CEO Alan Herrick said the company faced a challenging economic environment last year.
Now what: Guidance for the first quarter calls for service revenue in the ballpark of $295 million to $300 million, with adjusted operating margin of 9.2% to 10.2%. Full-year sales are predicted to be up 10% or more for 2013. Sapient has received at least three analyst downgrades today following the results, including from Citigroup, William Blair, and First Analysis, all of which now have neutral ratings on the stock.
Interested in more info on Sapient? Add it to your watchlist by clicking here.
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 our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.
The article Why Sapient Shares Plunged originally appeared on Fool.com.
Fool contributor Evan Niu, CFA, 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.
