Three months ago, storage systems builder Xyratex (Nasdaq: XRTX) beat third-quarter expectations and then saw its shares fall like wounded ducks. It looked like a buy-in opportunity to me because it was way undervalued relative to its fundamental health and any storage player that cheap was a potential buyout target back then.

That was then … this is now. Fourth-quarter results are in and Xyratex is falling again. Only this time, the company really didn't do so well.

Sales jumped 63% year-over-year to $397 million, but the Street wanted $420 million on average. Non-GAAP earnings more than doubled from $0.26 per share to $0.69 per share, yet the consensus target sat at $0.74 per share and was out of reach. For what it's worth, both metrics fell at the lower end of the company's own guidance -- which in turn was a disappointment when it was issued.

In his comments, CEO Steve Barber turned the spotlight to an outstanding year and made no reference at all to the fourth quarter. Revenue guidance for the coming period was upbeat but the earnings forecast less so. Demand softened last quarter, and it was a marketwide drop: Top three customers NetApp (Nasdaq: NTAP), Dell (Nasdaq: DELL), and IBM (NYSE: IBM) all remained at roughly their historical proportions of Xyratex's business.

The stock is still up from that last terrible fall, but the storage buyout binge seems to be over and I'm not as convinced that we're looking at a deep-discount value this time. Xyratex keeps up solid growth despite falling in the value-priced segment of the storage world, but proven performers and straight-up disk builders Western Digital (NYSE: WDC) and Seagate Technology (Nasdaq: STX) would be perfectly acceptable alternatives to a Xyratex trade today. Fellow Fool Jim Mueller would agree -- he just bought some Western Digital shares for his Rising Star portfolio!

Add Xyratex to your Foolish watchlist to follow its fortunes a bit closer.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. The Fool owns shares of International Business Machines and Western Digital. 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. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.