Why Nimble Storage Shares Jumped, Then Fell Today

Is Nimble Storage's volatility meaningful? Or just another movement?

May 30, 2014 at 6:43PM

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 Nimble Storage (NYSE:NMBL) initially rose by more than 8% early Friday following better-than-expected first-quarter results. However, Nimble then proceeded to fall more than 12% as the morning wore on before finally settling to close around 6% lower.

So what: Quarterly sales more than doubled year over year, to $46.5 million, which translated to a relatively flat adjusted net loss of $10 million, or $0.14 per share. Analysts, on average, were looking for an adjusted loss of $0.16 per share on sales of $43.81 million.

For the current quarter, Nimble Storage expects revenue in the range of $49 million to $51 million, and an operating loss between $11 million and $12 million. That should translate to an adjusted loss per share of $0.16 to $0.17. During the subsequent conference call, Nimble CFO Anup Singh also stated that this operating loss is "in the range of what we would expect for the next few quarters." Analysts' models were looking for a loss of $0.16 per share on sales of roughly $47.9 million.

But Singh also noted that, by the end of next fiscal year, they expect to hit breakeven on an adjusted operating income basis, with "breakeven on a free cash flow basis achieved ahead of that timeline."

Now what: However, some investors are also concerned about Nimble's impending expiration of its 180-day lockup period on June 11, when 62 million previously restricted shares will be made available for sale. Of course, that doesn't guarantee shares of Nimble Storage will fall then, especially considering recent disparate reactions to other companies' respective lock-up expirations.

In the end, though, Nimble stock definitely isn't "cheap" trading around 15 times trailing 12-month sales, so perhaps the market was simply hoping for a bigger beat. For now, I'm opting to simply put Nimble on my watch list to keep tabs on its progress during the next quarter or so. If it shows more evidence of a sustainable long-term trend, I might consider jumping in then.

Top dividend stocks for the next decade
In the meantime, the smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Steve Symington has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information