Please ensure Javascript is enabled for purposes of website accessibility

Why Gigamon Inc Shares Spiked Today

By Jeremy Bowman - Jul 29, 2016 at 5:39PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The networking-solution specialist moved higher after a strong earnings report.

Image Source: Gigamon.

What: Shares of Gigamon Inc (GIMO) were soaring today, closing up 12% after breezing past estimates in its second-quarter earnings report.

So what: The network-traffic specialist said it made an adjusted per-share profit of $0.30 in the quarter, up from $0.16 a year ago, and better than estimates at $0.24. Revenue jumped 46%, to $75.1 million, also topping expectations of $70 million.

The company has benefited from its close relationship with Amazon Web Services, and its cloud business should see revenue accelerate next year. CEO Paul Hopper said that "strong execution across the company" helped drive the impressive performance, noting, in particular, its first-to-market Security Delivery Platform.

Now what: In the last quarter, the company announced field trials of the Amazon Web Services Elastic Cloud Compute offering -- "the first visibility solution for information traversing with the public cloud." Gigamon's relationship with Amazon could prove to be lucrative as the AWS juggernaut is a fast-growing business set to hit $10 billion in revenue this year. The stock has more than doubled this year as the company has pushed further into the networking security market, which now makes up 60% of its revenue.

Gigamon did not issue guidance, but the strong demand for its products, and growth in cloud, should continue to push shares higher, as adjusted profits nearly doubled in the quarter.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Gigamon Inc. Stock Quote
Gigamon Inc.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.