Nimble Storage Inc (NYSE:NMBL), Higher Revenues, R&D Investment And Breakeven Projections


Dallas, Texas 12/04/2014 (FINANCIALSTRENDS) – Nimble Storage Inc (NYSE:NMBL) is trading in a narrow range since it bottom in mid-May. The stock is trading roughly 54% below its 52-week high of $58 with a market capitalization of $1.93 billion. Investment analysts at Pacific Crest Securities maintain a price target of $44 for Nimble’s stock that closed at $26.47 in the previous trading session.

The company reported significant upsurge of 77% in its 3Q14 revenues to $59.1 million. The figures did not only outperform the company’s guidance range of $56 to $58 million but also the consensus estimate by $1.3 million. The company continued its investment in research and development activities, which more than doubled to $19.67 million in 3Q14 compared to $9.36 million in 3Q13.

Emphasize on Research & Development

Suresh Vasudevan, Chief Executive Officer of Nimble Storage Inc (NYSE:NMBL), explained that emphasize on R&D activities help generate new products, which indeed helps sustain fast revenue growth. In addition, it also helps to get operating leverage from the company’s sales and marketing investments and hence maintain slower operating expense growth.

Vasudevan further explained how the R&D investment helped the company expand its targeted market base to $20 billion. Nimble essentially serves a $5 billion market for its iSCSI-based hybrid flash and disk storage product. However, considerable R&D spending helped the company to enter into $15 billion Fibre Channel marketplace.

Growth Projections and Breakeven

Nimble Storage Inc (NYSE:NMBL) is aggressively adding new customers and expanding its market scope. The company is also increasing its sales and marketing spending to enter overseas markets and target Fortune 1000 companies as its loyal base.

The company is eyeing $500 million in annual revenues while targeting 4Q14 revenues to be in range of $65 to $67 million. The company plans to break even by January 2016, on an operating income basis. However, it aims to be cash flow positive well before that time.