Why Aerohive Networks Inc Shares Plunged, Then Popped 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 Aerohive Networks (NYSE: HIVE  ) initially plunged more than 10% Friday morning, then recovered to trade up around 4% after the Wi-Fi and cloud-managed enterprise networking specialist released solid first-quarter results.

So what: Quarterly revenue rose 42% year over year, to $28.2 million, which translated to an adjusted net loss of $7.4 million, or $0.97 per share. Analysts, on average, were expecting a significantly wider adjusted loss of $1.32 per share on sales of just $26.1 million.

Now what: Aerohive Networks only held its IPO at the end of March, so its unsurprising to see volatility surrounding its first earnings report as a publicly traded company. Some investors are also worried, as revenue growth appears to be decelerating. For perspective, sales increased roughly 110% year over year in 2012, then by 50% 2013, and roughly 45% in the fourth quarter of last year.

At the same time, Aerohive handily exceeded Wall Street's expectations for Q1, so it's hard to blame the market for bidding up shares today. For now, though, and without a light at the end of the tunnel with regard to Aerohive's losses, I'm still content watching this one from the sidelines.

Warren Buffett just bought nearly 9 million shares of this company
In the meantime, there are plenty of other great stocks in which you can put your money to work. And why not follow the best? For example, imagine a company that rents a very specific and valuable piece of machinery for $41,000... per hour. (That's almost as much as the average American makes in a year!) And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report details this company that already has more than 50% market share. Just click HERE to discover more about this industry-leading stock... and join Buffett in his quest for a veritable landslide of profits!


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: 2951675, ~/Articles/ArticleHandler.aspx, 8/22/2014 6:51:09 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...


Advertisement