Market Overview

Nimble Storage May Be Regaining Its Footing On The Path To Growth


Nimble Storage Inc (NYSE: NMBL) reported its Q2 results ahead of the “modest” expectations, with product revenue in only the mid-teens and opex growth in the 30s.

BTIG’s Edward Parker maintained a Neutral rating on the company.

Regaining Footing

“Nimble is making solid progress in regaining its footing and is returning to a consistent growth trajectory. Most importantly, entry into the all flash array market is showing promising initial results,” Parker mentioned.

The company’s successful entry into the all flash market has been a crucial step, given that Nimble Storage has been late to the game. Also, since it is an emerging vendor, it does not have a large installed base.

The analyst noted that “initial results are encouraging, especially given the launch is occurring while the company is still in the midst of mending its go-to-market missteps.”

Investor Concern

On the other hand, investor concern regarding competition has been growing, while management also commented that the environment remains competitive.

However, with product gross margin at a four-quarter-high, Parker believes that competing on product value could at least hold pricing pressure at bay.

“Near-term numbers are starting to look safely “de-risked” and a return to 20+ percent growth and increasing likelihood that NMBL will hit its FY EBIT margin target will be viewed favorably,” the analyst added.

Although this could drive the stock, Parker believes that evidence of higher and more sustained growth, along with better visibility into profitability, would be needed for more meaningful upside.

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Latest Ratings for NMBL

Mar 2017NeedhamDowngradesBuyHold
Mar 2017Morgan StanleyDowngradesOverweightEqual-Weight
Mar 2017BMO CapitalDowngradesOutperformMarket Perform

View More Analyst Ratings for NMBL
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Posted-In: btig Edward ParkerAnalyst Color Reiteration Analyst Ratings


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