August 10, 2012
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 storage drive maker Fusion-io (NYSE: FIO ) soared a whopping 29% on Friday after its quarterly results and guidance easily topped Wall Street expectations.
So what: The stock has slumped in recent months on concerns over spiking customer acquisition costs, but a wide fourth-quarter beat -- adjusted EPS of $0.09 on revenue of $106.6 million versus the consensus of $0.03 and $96 million -- coupled with blowout guidance for 2013, is quickly easing those worries. After the company's gross margins sunk to a low of 51% in the second quarter, they bounced back dramatically in the fourth to 57.5%, giving investors plenty of optimism about profitable growth going forward.
Now what: Management now sees 2013 revenue growth of 45%-50%, translating into revenue of $521 million-$539 million, well ahead of Wall Street's view of $478.8 million. "[W]e are pleased with the momentum we have going into the next fiscal year," said Chairman and CEO David Flynn. "We believe we are still in the early stages of demonstrating the transformative potential of software defined storage solutions that deliver greater performance and efficiency for customers at a fraction of the cost of legacy systems." With the stock still well off its 52-week high even after today's big rally, there might even be time to buy into that bull talk.
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