Seeking Alpha

New post-IPO highs for Nimble Storage following RBC launch

  • A week after Nimble Storage (NMBL +7.2%) blasted off post-IPO, RBC (not an underwriter) has started coverage on the maker of hybrid flash/hard drive storage systems with an Outperform and $40 PT.
  • Analyst Amit Daryanani praises the "extremely attractive" price/performance ratio (i.e. $/IOPS) delivered by Nimble's proprietary CASL architecture (previous), which he believes allows the company's hardware to "provide the same capacity and IOPS as its peers using only 35-50% of the hardware."
  • This advantage stems from the ability of Nimble's software to convert random writes produced by apps (better handled by flash memory) into sequential writes (better handled by hard drives, still much cheaper than flash).
  • Daryanani also notes Nimble's ability to natively support inline compression (compression that takes place as data is being stored) using a proprietary algorithm allows it to "store up to 75% more data per gigabyte with minimal impact on performance or additional latency." Though rivals also support inline compression, Nimble's offering is unique in its ability to support variable storage block sizes.
  • Though the company now has a $2.7B market cap and trades at lofty multiples, Daryanani thinks Nimble could be an M&A target, given recent activity. Shares are now up 83% from an IPO price of $21.
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