Nimble Storage (NMBL): Raising PT But Gross Margin Remains In Focus - Wells Fargo
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Wells Fargo analyst, Maynard Um, reiterated his Market Perform rating on shares of Nimble Storage (NYSE: NMBL) but raised his valuation range slightly to $9 - $10 from $7 - $8. For the second quarter in a row, NMBL delivered better-than-expected results with the biggest surprise, to us, coming in product gross margin, which is expected to stay at similar levels near term. Product gross margin suggests no impact from competitive pressures and suggests revenue growth is not due to aggressive pricing.
After faltering three quarters ago, NMBL has executed well and the analyst is incrementally more positive given product gross margin strength, increasing avg revenue per customer metrics, and early all flash traction. However, NMBL still spent roughly $0.80 to
generate $1 in gross profit.
Shares of Nimble Storage closed at $8.82 yesterday.
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