Nimble Storage Gets Clobbered But Is It A Buy?
Alpha Gen Capital
Alpha Gen Capital
Nimble: Tech Still Has Good Growth Stories
Darspal S Mann
Darspal S Mann
Wed, May 25, 3:00 PM
Wed, May 25, 12:50 PM
Wed, May 25, 9:20 AM
Tue, May 24, 5:35 PM
Tue, May 24, 4:41 PM
- Flash storage maker Nimble Storage (NYSE:NMBL) is up 7.4% following Q1 earnings where it beat on top and bottom lines and grew its customer base substantially, though losses widened overall.
- Operating loss widened to $42.2M from a year-ago $28.9M, and non-GAAP net loss to $20.1M from $8M. Gross margin also slipped, to 65.7% on a non-GAAP basis from a year-ago 67.6%.
- Revenue breakout: Product, $68.4M (up 13.6%); Support and service, $18M (up 62.5%).
- All Flash Arrays accounted for 12% of total array bookings after launch, and large deals (greater than $250K) were up 51%. The customer base grew 48% Y/Y.
- The company's guiding to Q2 revenues of $93M-$96M (above consensus for $92.8M) and a non-GAAP net loss of $0.19 to $0.21, in line with expectations.
- Conference call to come at 5 p.m. ET.
- Press Release
Fri, Mar. 4, 12:46 PM
Fri, Mar. 4, 9:23 AM
- Gainers: SUNE +25%. CRC +18%. SDRL +17%. [[PBR-A]] +16%. CKEC +16%. SID +15%. PBR +14%. GGB +13%. BCEI +12%. BBD +12%. UPL +11%. CST +11%. CPE +10%. HPE +9%. CLNE +9%. ITUB +9%. BSBR +9%. CIG +%. [] +%. [] +%.
- Losers: MTW -77%. VTAE -41%. NMBL -19%. SYMC -18%. HRB -11%. ERJ -9%. TACT -9%. FBR -8%. AMBA -8%. SPLS -5%.
Thu, Mar. 3, 5:22 PM
- Though Nimble Storage (NYSE:NMBL) beat FQ4 sales estimates and posted in-line EPS, the company is guiding for FQ1 revenue of $83M-$86M and EPS of -$0.25 to -$0.27 vs. a consensus of $85.6M and -$0.16.
- The company blames the guidance on: 1) Seasonal weakness. 2) The potential impact of Nimble's all-flash array launch on existing sales cycles. 3) $4M in incremental product launch and go-to-market costs. 4) Higher sales/marketing investments to "re-accelerate growth" in Nimble's SMB ops and to drive all-flash array sales.
- FQ4 details: Product revenue (drives future support/service revenue) rose 25% Y/Y to $78.1M. Support/service revenue rose 77% to $17M. Non-GAAP gross margin fell 80 bps Y/Y to 66.4%. GAAP operating expenses rose 32% to $89.9M. Nimble ended FQ4 with $211M in cash, no debt, and a $115M deferred revenue balance.
- Nimble is down 8% after hours to $7.59, and down over 60% from where it traded prior to November's post-earnings plunge.
- Nimble's FQ4 results, earnings release
Fri, Feb. 26, 7:01 PM
- Nimble Storage (NYSE:NMBL) shot higher on Tuesday, gave back most of its gains Wednesday and Thursday, and then rose 11.5% today. Altogether, the beaten-down hybrid storage array vendor finished the week up 12%.
- The volatility follows the Tuesday unveiling of Nimble's first all-flash array line, a move that puts the company in competition with the likes of Pure Storage, SolidFire (due to be acquired by NetApp), and EMC's XtremIO unit. Nimble claims a max performance of 350K IOPS for its flagship AF9000 flash array, along with high densities (more than 2PB of storage in a 12U form factor) and the ability to create 4-node clusters. Looking to appeal to enterprises in addition to its traditional SMB base, Nimble also claims 99.9997% reliability.
- Piper's Andrew Nowinski (Overweight rating): "[T]he performance and capacity specifications [Nimble] provided compare very favorably to the market-leading offerings from EMC, Pure Storage and SolidFire ... while the initial specifications look impressive, we will need to gather further input from channel partners to assess whether this is a true advantage or more marketing hype.”
- Storage consultant Chris Evans also provides a measured response. "There are some interesting aspects to Nimble’s technology, including InfoSight and some features of the all-flash systems like Triple+ RAID and rack density ... With some of those features, Nimble have moved ahead of the competition, however it won’t take long for the other all-flash vendors to start using 4TB drives in their systems. This week’s announcement looks more to me as a catch-up than a deliberate move to wait until the market was right for an all-flash Nimble system.
- Nimble's FQ4 report arrives on March 3. Shares remain down 63% from where they traded before an FQ3 miss and weak FQ4 guidance were provided on Nov. 19.
Mon, Feb. 8, 2:37 PM
- Many tech stocks are seeing 6%+ losses as investors flee to safety yet again. The Nasdaq is down 3.4%, and the S&P 2.7%.
- As was the case on Friday following Tableau and LinkedIn's disappointing guidance, a slew of enterprise tech stocks are seeing big losses, with cloud software and security tech names well-represented on the casualty list.
- Also: Solar stocks are having another brutal day (TAN -6.7%) as energy stocks get routed amid fears Chesapeake Energy is close to bankruptcy. WTI crude oil is once more near $30/barrel.
- Enterprise software decliners: Adobe (ADBE -9.6%), Paylocity (PCTY -19.1%), Salesforce (CRM -9.9%), Workday (WDAY -12%), Guidewire (GWRE -12.5%), ServiceNow (NOW -11.5%), Zendesk (ZEN -13.8%), Paycom (PAYC -13.4%), Marin Software (MRIN -10.3%), Castlight (CSLT -8.4%), Cornerstone OnDemand (CSOD -12.1%), Atlassian (TEAM -13.2%), inContact (SAAS -9.6%), and Bazaarvoice (BV -14.5%).
- Enterprise security decliners: Palo Alto Networks (PANW -12.2%), FireEye (FEYE -9.8%), CyberArk (CYBR -11.5%), Proofpoint (PFPT -12.7%), Qualys (QLYS -8.9%), Imperva (IMPV -9.7%), Rapid7 (RPD -9.4%), and Barracuda (CUDA -8.4%).
- Solar decliners: SunEdison (SUNE -11.3%), SunPower (SPWR -8.8%), JinkoSolar (JKS -7.6%), SolarEdge (SEDG -7.9%), Yingli (YGE -7.1%), TerraForm Power (TERP -10.7%), and TerraForm Global (GLBL -9.2%).
- Other major decliners: Micron (MU -9.1%), Western Digital (WDC -10.5%), Arista (ANET -10.9%), Universal Display (OLED -10.6%), Rackspace (RAX -11.3%), Fitbit (FIT -8.7%), Nimble Storage (NMBL -11.3%), Sierra Wireless (SWIR -9.9%), Rocket Fuel (FUEL -9.8%), Knowles (KN -9%), Mitel (MITL -8.9%), and Alarm.com (ALRM -8.9%).
- Previously covered: Yelp, Cognizant, Tableau, Globant, Ambarella, European tech stocks
Tue, Feb. 2, 11:32 AM
- Beaten-up Nimble Storage (NYSE:NMBL) is rallying after announcing (following the end of FQ4) it now has over 7,500 customers for its flash/disk storage platform, up from 6,828 at the end of FQ3 (the October quarter) and 4,979 a year ago at the end of FY15. Nimble adds international clients now account for 20% of its customer base.
- Shares remain down 67% from where Nimble traded before the company posted an FQ3 miss and issued soft FQ4 guidance on Nov. 19. At the time, the company blamed a slower-than-expected payoff for its efforts to penetrate enterprises, and the impact of its enterprise efforts on SMB sales.
Dec. 2, 2015, 12:52 PM
- Nimble Storage (NYSE:NMBL) has unveiled new hardware/software reference designs (referred to as Cisco Validated Designs) that pair Nimble's flash/disk arrays with Cisco's (NASDAQ:CSCO) UCS servers, data center switches, and ONE management software. The company has also introduced a reference architecture for using its arrays and Cisco gear with Microsoft's SQL Server 2014 database.
- Nimble states its SmartStack offerings (they make use of Cisco hardware) have been deployed by 750+ enterprises to date. The solutions have been aimed at mid-sized firms, along with larger enterprises with departmental or distributed environments. Future designs "will target a range of large-scale enterprise use cases such as virtual infrastructure, virtual desktop infrastructure, databases, and other mission-critical deployments that use the entire family of products, including the Nimble CS700 [Fibre Channel] array."
- Shares remain down 46% from where they traded before Nimble missed FQ3 estimates and issued soft guidance on Nov. 19.
Nov. 24, 2015, 8:48 AM
- D.A. Davidson has upgraded Nimble Storage (NYSE:NMBL) to Neutral four days after shares lost half their value in response to the company's FQ3 miss and soft FQ4 guidance, and set an $11 target.
- D.A. started Nimble at Underperform in April 2014, when shares were at $35.00.
- NMBL +3.4% premarket to $10.60. 11 firms downgraded on Friday.
Nov. 20, 2015, 4:45 PM
- Barclays, Monness Crespi, Oppenheimer, Pac Crest, Raymond James, RBC, Stifel, UBS, Wells Fargo, William Blair, and Wunderlich all downgraded Nimble Storage (NYSE:NMBL) to neutral ratings in response to the company's FQ3 miss and weak FQ4 guidance. Shares closed at $10.05, making new post-IPO lows along the way.
- Those downgrading generally cited some mixture of competitive concerns, sales execution questions, and delayed profitability as the hybrid storage array vendor ramps investments in the face of slower-than-expected growth. Some also made the case a turnaround will take several quarters.
- UBS' Steve Milunovich: "Nimble’s problems are both self- and market-made ... It turned out that booking business in the enterprise has been more difficult than expected. A contributor to that difficulty is the lack of storage market growth and increasing competitiveness as EMC, NetApp, and others fight for fewer deals. The result for Nimble is some combination of (1) elongated sales cycles, (2) lost deals (the company claims no change in enterprise win rate), or (3) lower pricing (discounts did affect the product margin)."
- Raymond James' Brian Alexander: "We suspect public cloud migration is accelerating, and this is causing storage incumbents to become more aggressive in protecting their installed base, and Nimble cannot seem to pry customers away with its hybrid offering. All-flash arrays are likely going to have a larger impact as well, as flash price declines narrow the price/performance gap previously enjoyed by Nimble."
- William Blair's Jason Ader: "Nimble’s hybrid story has quickly aged against the all‐flash and hyperconverged trends sweeping the industry, providing daylight for exceedingly aggressive newcomers with little regard for profit margins. On the [SMB] side, while management insists that win‐rates are unchanged and reinvestment will solve the issues, we cannot help but worry that aggressive startups are leaping to take advantage of the opportunity. On top of all of this, the public cloud looms as an ever‐present, undiscriminating threat to on‐ premise storage in general."
- BMO's Keith Bachman is keeping an Outperform rating, even as he admits his original thesis was off. "We had previously assumed (incorrectly) that Nimble’s technology advantage would enable the company to take share in both the midmarket and enterprise, while also gradually growing profits and cash flows. However, we think the challenges of Nimble’s competitors are now engulfing Nimble, in terms of both revenue growth and profits." He thinks Nimble's planned entrance into the all-flash array could help, but isn't assuming a big contribution for now.
- However, Bachman also argues Nimble, whose market cap now stands at $783M, could make a compelling buyout target, particularly given a buyer could eliminate much of the company's non-R&D spend. "The incumbent storage vendors are seeking growth and could meaningfully improve Nimble’s sales leverage ... Nimble’s gross margins remain 67%, which would be accretive to Nimble’s competitors."
Nov. 20, 2015, 12:47 PM
Nov. 20, 2015, 9:17 AM
Nimble Storage, Inc. provides data storage platform. The company's adaptive flash platform, CASL flash-optimized file system and infosight cloud-based management software, are delivered as CS-series storage arrays coupled with support services and InfoSight subscription services. It enables IT... More
Industry: Data Storage Devices
Country: United States
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