Imperva May Have Been Conservative With Q2 Guidance

Imperva Inc IMPV shares have lost 26 percent since May 5, with the company reporting in-line 1Q results and announcing disappointing 2Q guidance. RBC Capital Markets’ Matthew Hedberg maintained an Outperform rating for the company, with a price target of $55. The analyst commented that nothing seems to have fundamentally changed and the 2Q guide projects “fixable issues.”

Following a meeting with management, analyst Matthew Hedberg expressed confidence in Imperva being able to fix the issues in EMEA and on-premise WAF within a few quarters. He said that nothing seemed to have changed fundamentally with either Imperva’s markets or products.

Hedberg expects shares to be under pressure until Q216, although the stock valuation appears too low for a company generating 30 percent revenue growth and improving profitability. He expects shares to rise, as consistency returns.

Take On Guidance

Management reduced 2Q guide by $4M, shifting more revenue to the back half of the year. “We believe management is being conservative with the Q2 outlook given the changes in EMEA leadership, but feel the pipeline is strong and should have 50% more productive sales reps in Q3/16 on a y/y basis as sales churn has slowed,” the analyst wrote.