Imperva Shares Plunge on Lower Revs - Analyst Blog

Shares of Imperva, Inc. IMPV plummeted 43.7% on Thursday's trade after the data center security solutions provider pre-announced its fiscal first-quarter revenue on Apr 9. Moreover, the company which is expected to release its detailed fiscal first-quarter results on May 1, 2014, expects to report greater-than-anticipated operating loss.

Owing to order delays from U.S. customers, Imperva's first-quarter revenue guidance is now expected to be within the $31.0-$31.5 million range, down from $36.0-$37.0 million guided in the last reported quarter. The Zacks Consensus Estimate is pegged at $37 million.

Imperva also expects its fiscal first-quarter operating loss in the range of $9.5 to $10.5 million, higher than $8.0 to $9.0 million, as guided earlier. Likewise, the company's expected loss of 40 to 44 cents per share was higher than the earlier forecast of a loss of 33 to 37 cents.

These downward revisions by Imperva compelled several law firms to start an investigation into the validity of its business prospects projected earlier.

Nonetheless, in the previous quarter, Imperva witnessed year-over-year revenue growth of 34% primarily due to strong demand in the U.S. and EMEA. Moreover, the company added 718 customers in fiscal 2013. The company also witnessed 43% growth in deals greater than $100K.

The company boasts its association with Amazon's AMZN Web Services and has clients that range from investment banks to auto manufacturers. The company has also resorted to acquisitions to expand its product portfolio to cater to such a diverse clientele, the most recent being Incapsula and Skyfence, aimed to bolster its cloud-based applications.

However, competition from IBM IBM and F5 Networks FFIV in the cyber security segment remains the headwind, going forward.

Imperva has a Zacks Rank #3 (Hold).