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 computer-networking products specialist Riverbed Technology
So what: Riverbed's weak first quarter -- EPS was cut nearly in half on revenue that fell short of estimates -- has prompted analysts to downgrade the stock. Management blamed the miss on changes in products and sales strategies, but investors are now concerned that the transition will seriously stunt near-term growth.
Now what: Riverbed now sees second-quarter EPS of $0.21-$0.22 on revenue of $193 million-$197 million, below Wall Street estimates of $0.24 and $201.9 million. "Looking ahead, we expect our new Steelhead, Granite, and Cascade products, along with Stingray and Whitewater, to form the basis for Riverbed's next leg of growth," said CEO Jerry Kennelly. "Our competitive position is strong, our addressable market is growing, and we are optimistic about the opportunity before us." For patient growth investors willing to deal with some near-term turbulence, today's big pullback might be a good chance to buy into that bullishness.
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