Here's Why Gigamon, Inc. Shares Got Crushed Today

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 network data traffic technologist Gigamon, Inc.  (NYSE: GIMO  ) plummeted 30% on Tuesday after its current-quarter outlook easily missed Wall Street expectations.

So what: The stock has plunged over the past month on concerns of slowing growth, and late Monday's disappointing preliminary Q1 results only reinforce those worries. While management blamed this miss on just a single expected large transaction from an existing customer that didn't materialize, Mr. Market is interpreting it as a sign that Gigamon's competitive position is weakening internationally.

Now what: Management now expects Q1 revenue of $31 million-$31.5 million with gross margins of 71%-72%, versus its prior view of $34 million-$35 million and gross margins of 78%-79%. "While we are disappointed in these preliminary results, we remain confident in our business strategy and the market opportunity," said CEO Paul Hooper. "We did not see any material change within the competitive landscape during the first quarter and we are encouraged by our initial assessment of our second quarter pipeline." More importantly, with Gigamon still boasting a rock-solid balance sheet and beaten-down stock price, the downside might be limited enough to bet on that bullishness. 

Not crushed: Here are six stock picks poised for incredible growth
They said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.


Read/Post Comments (0) | Recommend This Article (1)

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.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2907189, ~/Articles/ArticleHandler.aspx, 10/1/2014 8:28:50 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...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Advertisement