Nimble Storage (NMBL) Weakness Creates Buying Opportunity - Needham & Company
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Needham & Company analyst Richard Kugele reiterated a Buy rating and $12 price target on Nimble Storage (NYSE: NMBL) following Q3 results driven by strong AFA traction. The analyst said the weakness due to EPS guidance creates a buying opportunity.
Kugele commented, "In our view, the key questions on NMBL all received positive answers last night including: 1) where are they regarding AFA adoption; 2) how are they penetrating large enterprise deals; and 3) how are they doing in the cloud. On all fronts, NMBL excelled with AFA sales +~50% seq. (and now 24% of product bookings, up from 17% q/q), large deals >$250K growing 75% y/y, and CSPs up over 65% y/y and now 24% of bookings. Growth also reaccelerated in F3Q for the first time since the company implemented its reinvestment program, which we believe bodes well for F18 growth above our model. Overall, we argue investors should own NMBL not for a penny here or there in near-term EPS estimates, but rather for the long-term next-gen data center opportunity that we believe NMBL represents. Reiterate Buy and $12 tgt based on ~2x EV/NTM Sales."
Shares of Nimble Storage closed at $9.24 yesterday.
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