Nimble Storage Tumbles As Q4 Earnings Outlook Falls Short

Data storage provider Nimble Storage (NMBL)  plunged Wednesday after reporting third-quarter earnings late Tuesday that met targets, but giving a Q4 outlook that fell short of Wall Street estimates.

Nimble reported revenue of $102 million, up 26% year over year and matching the analyst consensus estimate. It reported a per-share loss minus items of 18 cents, also matching consensus, as polled by Thomson Reuters, for the quarter ended Oct. 31.

For Q4, Nimble expects revenue of $112 million to $115 million, the midpoint short of the consensus of $113.1 million. It expects a per-share loss ex items of 13 cents to 15 cents, where analysts had modeled a 12-cent loss.

Needham analyst Richard Kugele maintained a buy rating on Nimble stock, with a price target of 12.

Nimble stock crashed 16% to 7.76 in the stock market today. A year ago, shares plunged 50% (and haven’t since recovered) on disappointing Q3 earnings and Q4 guidance, with the CEO citing price competition. Shares of rival Pure Storage (PSTG) fell 2.1% Wednesday, to 14.18.

IBD’S TAKE: Nimble is far below its all-time high of 58 that dates to February 2014, shortly after its IPO, with a weak IBD Composite Rating of 49. Top-performing stocks can be found at Tech Leaders and Stock Spotlight.

Nimble makes hybrid storage systems that combine disk drives with flash chips for enterprises and cloud-based services, in addition to making all-flash storage systems. Nimble had an initial public offering in December 2013, with shares priced at 21.

“Overall,” Kugele wrote in a research note, “we argue investors should own Nimble not for a penny here or there in near-term EPS estimates, but rather for the long-term next-gen data-center opportunity that we believe Nimble represents.”

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Nimble added about 600 new customers in Q3, bringing the total to 9,450, up 38% year over year.


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