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Why Fusion-io Got Crushed

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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 Fusion-io (NYSE: FIO  ) are getting crushed today by as much as 10% after the flash specialist reported earnings.

So what: Third-quarter revenue soared 40% to $94.2 million, with non-GAAP coming in at $6.9 million, or $0.06 per share. However, on a GAAP basis, the company ended up posting a $4.7 million loss, or $0.05 per share.

Now what: Fusion-io continues to see minor growing pains as gross margin ticked lower, which is also why shares sold off after the last earnings release. The future still looks promising, with full-year revenue growth predicted to be about 75%. Benchmark is now reiterating its "buy" rating while boosting its price target to $35, citing a growing market for its unique flash architecture.

Interested in more info on Fusion-io? Add it to your Watchlist.

Fool contributor Evan Niu holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (3) | Recommend This Article (0)

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 April 27, 2012, at 4:35 PM, texasredraider94 wrote:

    MarketWatch.Com erroneously reported FIO's earnings after the bell yesterday, causing the stock to trade down some 15%+ after hours. Fusion beat on every metric, raised their forecast for revenue, margin growth, and growth rate for the 4Qtr & full year. Today should of been a great day for longs, and I'm confident that day will come. In the meantime, someone at MarketWatch should lose their job! I'm just glad the stock largely recovered & I didn't sellout down 15%.

  • Report this Comment On April 27, 2012, at 5:05 PM, webman88 wrote:

    MarketWatch anouncement was a first. Totally reversing the information provided and not edited is a failure from a publication with past integrity.

    Fusion io has shown resiliency and with increasing the Gross Margin by 1% quarter over quarter is indicative of concern for costs. Let's all enjoy the rewards of the future growth of this company!

  • Report this Comment On May 02, 2012, at 11:35 AM, youngblood58 wrote:

    texas: what MW posts doesn't influence a stock price that much. Seriously.

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Evan Niu
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Evan is a Senior Technology Specialist at The Motley Fool. He was previously a Senior Trading Specialist at a major discount broker. Evan graduated from the University of Texas at Austin, and is a CFA charterholder.

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Related Tickers

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FIO $0.00 Down +0.00 +0.00%
Fusion-io, Inc. CAPS Rating: ***