Recs

5

Riverbed Technology Shares Got Crushed: What You Need to Know

By Brian D. Pacampara | More Articles
January 27, 2012 | Comments (5)

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of WAN acceleration specialist Riverbed Technology (Nasdaq: RVBD  ) plummeted 22% today after its current-quarter guidance came in well below Wall Street expectations.

So what: While Riverbed's fourth-quarter profit jumped an impressive 53%, a disappointing first-quarter outlook -- management sees revenue of $183 million to $187 million versus the consensus of $197 million -- is reinforcing market concerns about rapidly slowing growth. The shares took off like a rocket in 2010, but forecasts of a cooling WAN market now have plenty of investors questioning Riverbed's growth potential.

Now what: I'd look into this plunge as a possible buying opportunity. "We believe we are in the strongest strategic and competitive position in our history," CEO Jerry Kennelly said. "Adding to that, early in 2012 we will be entering what we think will be Riverbed's most exciting and important product cycle yet." With the stock now down 47% from its 52-week highs, it might be a good time to bet on that tailwind.

Interested in more info on Riverbed? Add it to your watchlist.

The Steve Jobs Betrayal
You may already know that in the final year of his life, Jobs revealed a stunning betrayal — and told his biographer, "I will spend my last dying breath... and every penny of Apple's $40 billion in the bank to right this wrong." What was it that made Jobs so irate — and why could it make a few in-the-know investors some major profits over the coming months and years?

Enter your email address below to find out what made Jobs so enraged!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of and writing covered calls in Riverbed. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 27, 2012, at 1:47 PM, plange01 wrote:

    riverbed with decent earning for this economy is way oversold and should recover at least half of its losses on friday next week....

  • Report this Comment On January 27, 2012, at 1:51 PM, mwlove wrote:

    I am happy to be able to buy Riverbed at a 20% discount. How many people sold after hearing "lowered guidance" without listening to the call or reading the transcript? Here's the CFO's guidance:

    "We're entering the year with the biggest pipeline we've ever had and we're on the cusp of multiple new product launches, including a major new Steelhead platform. Historically, when we've introduced new hardware, we've seen some disruption to product sales, followed by accelerated growth. We're anticipating the same trend with the platform being launched this quarter. We're also expecting a more seasonal pattern to our sales in 2012."

    So there will be disruption to sales next quarter because new products (including and upgrade to Steelhead) will be introduced. Sounds to me as if 2012 will be a great year. If that counts as "lowered guidance", bring it on.

  • Report this Comment On January 27, 2012, at 1:56 PM, mwlove wrote:

    Forget waiting for next week to see the stock recover. Looks as though they may recover half the loss by the end of this week (i.e., today's close). I'm already up 5% on the shares I bought this morning. What a silly sell-off.

  • Report this Comment On January 27, 2012, at 2:36 PM, WANspeak123 wrote:

    See how Silver Peak is shaking up the WAN optimization market and disrupting folks like Riverbed. Read the latest Gartner Magic Quadrant report: http://www.silver-peak.com/landing/Gartner-Magic-Quadrant.

  • Report this Comment On January 27, 2012, at 6:41 PM, BlazerMania wrote:

    I've never understood why a 10% decrease in projected should translate into a 20% decrease in a company's market valuation. Seems a bit much to me.

Add your comment.

Compare Brokers

Fool Disclosure

DocumentId: 1767517, ~/Articles/ArticleHandler.aspx, 5/27/2012 1:36:22 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 12,454.83 -74.92 -0.60%
S&P 500 1,317.82 -2.86 -0.22%
NASD 2,837.53 -1.85 -0.07%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

5/25/2012 4:00 PM
RVBD $16.52 Up +1.00 +6.44%
Riverbed Technolog… CAPS Rating: ****

Advertisement