Why Exponent's Shares Dropped
Jan 31st 2013 9:22PM
Updated Feb 1st 2013 7:20AM
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 technical consultant Exponent fell as much as 13% today, after the company released earnings.
So what: Revenue rose 7%, to $65.0 million, and net income increased 10%, to $8.5 million, or $0.60 per share. But analysts expected $0.63 per share and, after beating expectations by a pretty wide margin in the previous three quarters, the earnings miss was pretty disappointing.
Now what: This is really just a pullback from a high valuation and overinflated expectations. The company is still growing both top and bottom line results, so there's nothing investors should be panic about. I'd like to get a better value than 19 times trailing earnings considering the single-digit growth rate, so if shares fall further, there could be a nice entry point for investors.
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The article Why Exponent's Shares Dropped originally appeared on Fool.com.Fool contributor Travis Hoium has no position in any stocks mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw. 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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