Gigamon Inc. (GIMO) has seen its earnings estimates increase due to their shift towards security applications. While Gigamon does not attempt to directly compete with major security companies, it does compliment these companies by enhancing solutions to security providers. Due to Gigamon’s unique position, it allows the company to provide security functionality.
This Zacks Rank #1 (Strong Buy) stock is engaged in providing intelligent Traffic Visibility solutions for enterprise, data centers, and service providers. Its products consist of GigaVUE, GigaSECURE, GigaSMART, and GigaTAP products. The Company’s fabric enables information technology organizations to forward traffic from network infrastructure to management, analysis, and compliance and security tools.
Gigamon expanded their client base last quarter by adding 60 new customers. Further, the company’s new in-band (inflow of production traffic) is expected to spur new sales to existing customers who are already using the out-of-band (mirror traffic feeding test systems, and appliances). Also, management stated that they see opportunities for direct security function applications on their platforms, opening up another avenue of revenue for the company.
Increasing Estimates
The graph below shows the historic and future EPS estimates for Gigamon Inc.
Over the past 30 days earnings estimates for Q2 15, Q3 15, FY 15, and FY 16 have all increased; Q2 15 rose from -$0.06 to $0.00, Q3 15 moved from $0.01 to $0.02, FY 15 jumped from -$0.08 to $0.07, and FY 16 leaped from $0.07 to $0.24.
Gigamon has a solid track record of beating earnings estimates as well. The company has beaten the Zacks Consensus Earnings and Revenue estimates for the past three consecutive quarters. Further, the company has posted a four quarter average positive earnings surprise of 159.59%, indicating that not only do they beat expectations, they crush them.
Bottom Line
In Q1 15, the company saw revenues increase 48% y/y, new partnerships to extend analytical capabilities, unveiled the Software Defined Visibility framework, and expanded GigaVUE-OS capabilities. Further their growth in the security field has enabled the company to further expand into the Department of Defense Unified Capabilities Approved Product List. The combination of these factors has made Gigamon Inc, the Zacks Bull of the Day.
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