Trade-Ideas: Nimble Storage (NMBL) Is Today's "Dead Cat Bounce" Stock - TheStreet

Trade-Ideas LLC identified

Nimble Storage

(

NMBL

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Nimble Storage as such a stock due to the following factors:

  • NMBL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.8 million.
  • NMBL has traded 264,878 shares today.
  • NMBL is up 3.1% today.
  • NMBL was down 50.7% yesterday.

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More details on NMBL:

Nimble Storage, Inc. provides flash-optimized storage platforms. The company's software and storage systems handle various mainstream applications, including virtual desktops, databases, email, collaboration, and analytics. Currently there are 15 analysts that rate Nimble Storage a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Nimble Storage has been 907,500 shares per day over the past 30 days. Nimble has a market cap of $1.6 billion and is part of the technology sector and computer hardware industry. Shares are down 63.5% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Nimble Storage as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Computers & Peripherals industry average, but is greater than that of the S&P 500. The net income has decreased by 0.7% when compared to the same quarter one year ago, dropping from -$28.39 million to -$28.57 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Computers & Peripherals industry and the overall market, NIMBLE STORAGE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • NMBL has underperformed the S&P 500 Index, declining 23.32% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • NIMBLE STORAGE INC has improved earnings per share by 7.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NIMBLE STORAGE INC reported poor results of -$1.37 versus -$0.32 in the prior year. This year, the market expects an improvement in earnings (-$0.27 versus -$1.37).
  • The gross profit margin for NIMBLE STORAGE INC is currently very high, coming in at 70.28%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -35.39% is in-line with the industry average.

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