Why Ubiquiti Networks Inc. Shares Jumped
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 thesis.
What: Shares of Ubiquiti Networks, rose more than 10% during Friday's intraday trading, then settled to close up around 4% after the company turned in solid fiscal second-quarter results.
So what: Quarterly revenue rose 85% year over year, to $138.5 million, which translated to adjusted earnings that more than doubled, to $0.48 per diluted share. Analysts, on average, were expecting earnings of $0.45 per share on sales of $133.33 million.
In addition, Ubiquiti projects current quarter revenue between $138 million and $144 million, with adjusted earnings per share between $0.47 and $0.51. By contrast, analysts were expecting fiscal Q3 earnings of $0.46 per share on sales of $137.52 million.
Now what: The numbers were great all around, so it's hard to blame investors for bidding shares up today. Shares may not look particularly cheap trading at 21 times next year's estimated earnings, but I think that's a well-deserved premium given Ubiquiti's growth.
With a healthy balance sheet and assuming it can maintain its momentum going forward, there's no reason Ubiquiti shouldn't continue to reward long-term investors.
See the names of six more promising growth stocks in this free report
Ubiquity isn't the only fast-growing company out there. To be sure, consider the investing expertise of Motley Fool co-founder David Gardner, who has proved skeptics wrong, time, and time, and time again, with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently, one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.
The article Why Ubiquiti Networks Inc. Shares Jumped originally appeared on Fool.com.
Steve Symington has no position in any stocks mentioned. The Motley Fool recommends Ubiquiti Networks. 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 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.