Nimble Storage, Inc NMBL is set to report fourth-quarter fiscal 2016 results on Mar 3. Last quarter, the company delivered in line earnings. However, the company has delivered negative earnings surprises in the last four quarters, with an average of 4.35%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Nimble Storage is positioning itself to benefit from the ongoing shift to flash-centric architectures from the conventional disk-centric architectures with its Adaptive Flash platform. Meanwhile, it is acquiring large enterprise customers and equally concentrating on growing its mid-size customer base.
Recently, the company launched AF-series All Flash Arrays storage equipment that relies solely on flash memory chips. Analysts view this as a big positive for the company that will allow it to gain traction in the all flash segment. However, they remian wary of the stiff competition from existing players, like EMC and Pure Storage, which might weigh on Nimble’s margins.
For the fiscal fourth quarter, the company expects revenues in the range of $87 million to $90 million. Non-GAAP operating loss is expected within $8–$10 million. Non-GAAP loss per share is projected in the range of 11 cents to 13 cents.
Earnings Whispers
Our proven model does not conclusively show that Nimble is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.
Zacks ESP: Nimble’s Earnings ESP is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 36 cents.
Zacks Rank: Nimble’s Zacks Rank #3 when combined with a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stocks to Consider
Here are a few stocks that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter
Superior Industries International, Inc. SUP, with an Earnings ESP of + 11.11% and a Zacks Rank #1.
Casey's General Stores, Inc. CASY, with an Earnings ESP of + 10.11% and a Zacks Rank #2.
The Cooper Companies Inc. COO, with an Earnings ESP of + 3.17% and a Zacks Rank #2.
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