Why Ellie Mae Stock Soared 13% This Morning

What's happening: Shares of Ellie Mae were up 13% as of 11:30 a.m. EDT following the mortgage-processing services company's second-quarter financial report Thursday afternoon. The company exceeded the high expectations that investors had, with revenue gains of 65% helping to lift adjusted earnings by 50% to $0.48 per share, crushing the consensus forecast and reflecting the continued strength of the mortgage market.

Why it's happening: Ellie Mae makes software products that help mortgage processors handle the loans they manage, and the home-loan market has been hopping lately as a combination of rising prices and the threat of higher future interest rates have spurred many would-be purchasers into quick action. The company reported impressive gains in the number of users of its Encompass software package, and adoption of its cloud-based services in particular has accelerated as customers see the value of Ellie Mae's expertise. Revenue per user also climbed, supporting the company's overall growth.

Despite the high expectations that investors already have for the mortgage-processing software maker, Ellie Mae also boosted its guidance for the full year even further upward. With about a 5% increase in sales guidance and a 15% to 20% push upward in its adjusted earnings range, Ellie Mae doesn't see any slowdown from the favorable conditions that are driving its impressive results. Eventually, the cyclicality of the mortgage market is likely to lead to slower growth for mortgage-management software packages, but for now, investors in Ellie Mae are pleased at how well the company is taking advantage of the best of times in the mortgage industry.

The article Why Ellie Mae Stock Soared 13% This Morning originally appeared on Fool.com.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Ellie Mae. 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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