Why ARC Document Solutions Shares Popped

Before you go, we thought you'd like these...
Before you go close icon

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 ARC Document Solutions , or American Reprographics, have risen 10% today following the company's solid third-quarter earnings report.

So what: ARC's revenue rose 2% year over year in the third quarter to reach $101.3 million, a modest gain, but enough to best Wall Street's consensus top-line estimate of $99.3 million. The company's earnings of $0.02 per share matched the consensus. Looking ahead, ARC now sees a full-year EPS range of $0.06 to $0.09 per share, slightly ahead of the $0.08 estimate on the high end.


Now what: ARC had already doubled over the past year before today's pop came along, but this is all despite the fact that revenue has been on a steady decline, profit has been elusive, and neither EBITDA nor free cash flow have shown any growth over the past five years. In fact, free cash flow has been moving lower along with revenue! There's nothing in the company's "progress" of late to indicate that this stock price growth is justified, so I'd simply avoid it entirely.

Got iPad?
Apple
's newest iPad Mini with Retina display might be hard to come by this quarter, given all the reports of supply constraints. Well, we're going to be sure to get a few -- and give them away! That's right: For the first time ever, The Motley Fool is hosting a contest where you can win a free iPad Mini with Retina display. All you have to do is tell us why you love The Motley Fool by clicking here! We'll pick the three most Foolish submissions to receive a free iPad Mini with Retina display.

See full terms and conditions by clicking here

The article Why ARC Document Solutions Shares Popped originally appeared on Fool.com.

Fool contributor Alex Planes has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. 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.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners