Gigamon's Weak Guidance: An Opportunity To Scoop Up Cheap Shares
- Gigamon announced weak preliminary Q2 results with a 17% drop in forecasted revenues. This caused a 30% drop in price.
- Management has over-promised and under-delivered, causing investors to lose confidence in the company and its leadership. This could make for a cheap M&A target for competitors.
- Going forward, top line will grow at a slower pace than in the past. At a P/S ratio of 2.7x, market is pricing as if all growth is gone.