Macquarie Lifts Estimates On Nimble Storage, Lowers Price Target And Maintains Rating; Cites Management's Potential

Courtesy of Benzinga.

Nimble Storage Inc (NYSE: NMBL) was highlighted in a research report Tuesday by Macquarie Research analysts as showing positive signs for growth within its sales and marketing areas. The firm believes management will recover its share gain again.

Macquarie lifted estimates on Nimble Storage, while maintaining an Outperform rating and lowering the price target of $15 on Tuesday.

“We adjust our FY17 estimates to reflect our belief that Nimble is likely to invest aggressively in sales and marketing in the fiscal first half of FY17 in order to reignite growth and drive market share gains in 2HFY17,” the firm stated.

Related Link: Here’s Why Rod Hall Likes Nimble Storage

Revisions

Macquarie updated the FY17E Revenue from a previous $363.0 million with an EPS of ($0.46) to the new estimates of $372.5 million with an EPS of ($0.63).

Revision Justifications

Macquarie Research cited the hybrid flash/disk storage segment as a likely catalyst for mainstream enterprise and cloud storage market. Further, the note stated the company remains the best pure play based on “its differentiated built-from-the-ground-up architecture.”

The company’s miss and guide down in 3QFY16 is being viewed as transitory by Macquarie Research, and as the company returns to investing aggressively in its go-to-market effort, the firm noted it is “likely to recover its share gain momentum.”

Recent-Past Performance

Nimble Storage’s stock price in November was particularly volatile, trading from highs at the $23 handle and as low as $10.05. December saw a new 52-week low on December 18 at $9.70, and the stock has since continued to reestablish that marker.

The company’s stock was recently seen trading at $9.38, down 1.11 percent.

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