Raymond James Maintains Strong Buy Following Nimble Storage (NMBL) 1Q16

Raymond James maintains a Strong Buy rating and $33.00 price target on Nimble Storage (NYSE: NMBL) following 1Q16 results. NMBL revenue of $71.3M beat $69.1million estimates. Reported non-GAAP EPS of $(0.10) compared to $(0.13) estimate.

Analyst Brian Alexander commented, "We maintain our Strong Buy rating on shares of NMBL following better than expected revenue and EPS results. In a quarter where legacy vendors struggled mightily, Nimble exceeded consensus revenue by 2% and guided 1% above for July. Growth is tracking around 50% (product sales up 46%) in an industry that is not growing, reflecting an advantaged hybrid architecture. New customer additions were 542 in the quarter, with over 40% of these in the strategically important enterprise and service provider spaces. Fibre channel traction continues, reflecting 14% of bookings. This is driving up average deal size and overall sales productivity, as bookings greater than $100,000 increased 142% y/y and deals greater than $250,000 more than quadrupled. Finally, repeat bookings remain healthy. We note that management’s F4Q16 breakeven target remains intact and confidence in revenue growth at or near current levels appears high. Given the potential for continued Fibre Channel adoption (which expands the TAM 4X), along with expanding channel partnerships and greater international acceptance, we remain confident in Nimble’s growth prospects and above-industry average gross margin (68%)."

Alexander also added, "Revenue and EPS guidance of $77-79 million and $(0.11) to $(0.12) were in-line with our estimates of $78.2 million /$(0.12) and consensus $77.1 million/$(0.12). While the company is still targeting breakeven by 4Q, guidance implies a greater q/q operating loss in the July quarter before recovering in 2H. Free cash flow was weaker due to timing of accruals and employee stock incentives and may be impacted by large enterprise and fibre channel growth as DSOs and DIO increased materially y/y."

For an analyst ratings summary and ratings history on Nimble Storage click here. For more ratings news on Nimble Storage click here.

Shares of Nimble Storage closed at $25.40 yesterday.

You May Also Be Interested In

• Citi Downgrades Arch Coal (ARCH) to Neutral
• Sage Therapeutics (SAGE) PT Lowered to $17 at Oppenheimer
• Oppenheimer Starts Sprout Social Inc. (SPT) at Outperform, 'Owning the Category's Socialite'