What Nimble Storage's AFA Launch Means For Competition

On Wednesday, Summit Research issued a company note on Nimble Storage, Inc. NMBL after the company formally launched its highly anticipated All-Flash Array (AFA). Currently analysts at Summit rate Nimble Storage as a Buy with a $22 price target. In their report, analysts Srini Nandury and Srini Sundararajan, highlighted the implications of Nimble's AFA launch on several competitors: Pure Storage PSTG: "In our view, Nimble's launch of AFA does not bode well for Pure Storage... we expect elongated sales cycles, accompanied probably by gross margin pressure beginning April quarter." Seagate Technology PLC STX and Western Digital Corp. WDC: "We expect the enterprise disk business of both Seagate and Western Digital to decline faster than what the Street is expecting. The drive vendors will be under enormous strain for next few quarters as the enterprise drive shipment declines will accelerate." While analysts noted that many of Nimble's competitors are hurt by this news, Summit did highlight that EMC Corporation EMC and NetApp Inc. NTAP have other lines of businesses and because of this diversification, Nimble's AFA launch will not affect their core business operations to the extent of other, less diversified competitors. Currently, Nimble is trading at $7.07, down 1.94 percent. Currently, Pure Storage is trading at $12.59, down 1.56 percent. Currently, Seagate Technology is trading at $30.77, up 0.09 percent. Currently, Western Digital is trading at $43.51, up 1.72 percent. Currently, EMC is trading at $25.27, even for the day. Currently, NetApp is trading at $24.64, up 1.32 percent.
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Posted In: Analyst ColorPrice TargetAnalyst RatingsSrini NandurySrini SundararajanSummit Research
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