Last Week's Biggest Stock Movers: Builders, Akebia
Builders FirstSource (BLDR) -- Up 90 percent last week
The biggest gainer last week was Builders FirstSource, nearly doubling after announcing a shrewd acquisition. The building materials supplier will buy ProBuild in a $1.63 billion deal. Buyers don't often jump on buyout news, but the deal will result in a combined company that generated $6.1 billion in revenue last year. Builders FirstSource eventually aims to achieve as much as $200 million in annual costs savings.
Wall Street certainly is enamored with the prospects. Sterne Agee upgraded the shares, boosting its price target from $6 to $19. It's not often that a Wall Street pro will more than triple a stock's price target.
Travelzoo (TZOO) -- Up 31 percent last week
Shares of Travelzoo shot higher after posting better-than-expected quarterly results. This doesn't mean that it was a great report. The online travel deals publisher saw revenue decline 9 percent from a year earlier. Profitability took an even bigger hit, clocking in at 13 cents a share after earning $0.31 a share during the same quarter a year earlier.
That may not sound so great, but analysts were holding out for net income of just 8 cents a share. It's the first time in three quarters that the company behind the weekly Travelzoo Top 20 emails surpassed analyst expectations.
Smith & Wesson (SWHC) -- Up 18 percent last week
Despite cries for more gun control and prolific officer shootings leading many activists to call for less-than-lethal weaponry, firearm makers can't seem to be making their guns fast enough. Smith & Wesson soared after boosting its forecast for gun sales for its current fiscal quarter. Rival Sturm Ruger (RGR) didn't have any news to report, but it also posted a double-digit gain in sympathy.
Akebia Therapeutics (AKBA) -- Down 20 percent last week
Last week's biggest decliner was Akebia Therapeutics, shedding a fifth of its value after completing a secondary stock offering. Akebia is a biotech upstart tackling kidney disease. It has a product working its way through the regulatory approval cycle for the treatment of anemia related to chronic kidney disease in non-dialysis patients.
Akebia was able to raise $60 million in the dilutive secondary offering, but it had to price the new shares at $8.25 to smoke out enough buyers. That's not very encouraging for a company that kicked off the week trading in the double digits.
Pep Boys (PBY) -- Down 11 percent last week
Pep Boys ran out of gas. The automotive service and products chain with 806 locations posted a slight increase in sales in its latest quarter, fueled mostly by an uptick in service revenue. However, it did post a quarterly loss as Pep Boys focused on high-growth areas with temporarily suppressed margins.
Pep Boys is going through a transition, but the market isn't always patient. Investors were holding out for a small quarterly profit. They didn't get it, so they drove away.
ServiceNow (NOW) -- Down 11 percent last week
ServiceNow also posted quarterly results last week, and unlike Pep Boys it came through with better-than-expected results. The one thing that sank the shares of the cloud-based provider of enterprise software solutions was that its outlook for the current quarter was off the mark.
The stock has been a big winner since going public at $18 less than three years ago, but it's also trading at a lofty earnings multiple that's in the triple digits even if we look out to next year's projected profit. You can't offer guidance that falls short of forecasts in that scenario. Brean Capital reiterated its bullish rating on the stock, but lowered its price target from $97 to $90.
Motley Fool contributor Rick Munarriz 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. Check out our free report on one great stock to buy for 2015 and beyond.