Why Bankrate Shares Boomed
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 online financial data publisher soared 13% today after its quarterly results and outlook topped Wall Street expectations.
So what: Bankrate shares have been crushed over the past year on weak lead generation, but a wide first-quarter beat -- adjusted EPS of $0.12 per share on revenue of $108.4 million versus the consensus of $0.09 and $102.6 million -- coupled with better-than-expected guidance suggests that things are starting to turn. Management cited rebounding credit card demand and improved insurance metrics for the upbeat report, suggesting that its turnaround initiatives -- mainly the transition to higher-quality lead model -- are steadily gaining traction.
Now what: Management expects full-year 2013 revenue to remain relatively flat compared to 2012, implying a top-line of about $457 million and ahead of Wall Street's view of $452.2 million. "We are maintaining our previous position on guidance and anticipate double-digit growth in the [second half of 2013], especially as the current momentum in insurance continues," President and CEO Thomas Evans said. With the stock now up about 30% over the past month alone and trading at a 20-plus forward P/E, however, I'd wait for some of the optimism to fade before buying into that turnaround talk.
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The article Why Bankrate Shares Boomed 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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