Why Support.com Shares Soared
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 Support.com have risen 20% today after the company beat earnings expectations. Investors also seem happy that the company's CFO is leaving, because there's nothing else in the report that appears to justify this much optimism.
So what: Support.com reported revenue of $20.1 million and earnings of $0.07 per share for the second quarter, against Wall Street's consensus of $20.0 million and $0.05 per share. The company's bottom-line beat was respectable, but looking forward, Support.com now expects third-quarter revenue in the $21 million to $22.5 million range, and adjusted EPS of $0.03 to $0.05. Neither number pops -- analysts had modeled $21.5 million in revenue and $0.06 in EPS, so the bottom-line softness is a bit troubling.
Support.com also announced that CFO Shelly Schaffer will be stepping down to work with Simply Hired in the fall, and will be staying on only until the end of the fiscal third quarter.
Now what: Support.com's got a high triple-digit P/E at the moment, as its earnings finally nudged into positive territory this year after spending years dawdling in negative territory. However, it seems that today's pop attaches a little too much excitement to what seems to be relatively modest progress. Shares have now doubled over the past year. How much more momentum is left?
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The article Why Support.com Shares Soared originally appeared on Fool.com.Fool contributor Alex Planes 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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