What Happened:

Shares of casual restaurant chain Noodles & Company (NASDAQ:NDLS) jumped 22.1% in the afternoon session after the company reported first-quarter earnings results. Noodles beat analysts' EPS expectations this quarter, though it was still negative. On the other hand, its revenue slightly missed expectations as its same-store sales fell 5.4% year on year. Reassuringly, management noted that sales and traffic trends improved throughout the quarter despite difficult weather and tough comps. It suggests the trends might improve with the company observing positive comparable sales and traffic growth in April. Overall, we think this was a mixed quarter.

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What is the market telling us:

Noodles's shares are quite volatile and over the last year have had 50 moves greater than 5%. But moves this big are very rare even for Noodles and that is indicating to us that this news had a significant impact on the market's perception of the business. 

The biggest move we wrote about over the last year was 2 months ago, when the stock dropped 14.4% on the news that the company reported fourth-quarter results with revenue and EPS falling short of Wall Street's estimates thanks to worse-than-expected same-store sales performance (4.2% system-wide declines compared to estimates of 3.9%). Furthermore, its full-year revenue guidance fell short as the company expects to build fewer new restaurants than Wall Street had forecasted. Overall, this was a bad quarter for Noodles.

Noodles is down 31% since the beginning of the year, and at $2.15 per share it is trading 55.9% below its 52-week high of $4.86 from May 2023. Investors who bought $1,000 worth of Noodles's shares 5 years ago would now be looking at an investment worth $280.03.

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