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Gigamon Hits 52-Week High on Strong Q1 & Security Vertical
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Shares of Gigamon Inc. hit a new 52-week high of $38.59 on Jun 22, eventually closing at $38.24. The stock has delivered a strong one-year return of 12.8% and a year-to-date return of 43.9%. The average trading volume for the last three months aggregated approximately 518.37K.
What is Driving the Stock Upward?
Gigamon’s shares have been on the rise ever since the company declared better-than-expected first-quarter fiscal 2016 results on Apr 29, 2016.
The company posted adjusted earnings of 8 cents, which came ahead of the Zacks Consensus Estimate of 4 cents. Also, the bottom line fared better than a loss of 2 cents per share reported in the year-ago quarter.
Gigamon’s revenues of $67.2 million increased 43% from the year-ago quarter and surpassed the Zacks Consensus Estimate of $62 million.
According to the CEO of Gigamon, Paul Hooper, "Security continues to be a significant growth driver for us representing over 60% of our transactions this quarter." He also said, “The strength in this vertical in combination with accelerating growth in our Mobility market addressing the needs of Service Providers around the globe, delivered an all-time high revenue result."
With respect to earnings surprise, this Zacks Rank #3 (Hold) stock has surpassed the Zacks Consensus Estimate in three out of the last four quarters with an average surprise of 100%.
An overall positive trend resulted in upward estimate revisions for Gigamon. Over the last 60 days, all the three estimates for Gigamon were revised upward for fiscal 2016. The Zacks Consensus Estimate for fiscal 2016 went up 23.1% (9 cents) to 48 cents per share.
Going forward, Gigamon’s product launches will continue to drive growth at the company. The GigaSMART and GigaVUE-HC2 platforms are witnessing increased adoption. Moreover, the company is adding clients, which should boost its financial results.
However, in addition to intensifying competition from Juniper Networks Inc. (JNPR - Free Report) and Cisco (CSCO - Free Report) , the company is witnessing pricing challenges. Therefore, to retain market share, Gigamon may have to lower the prices of its products and services, which will, in turn, hurt its profitability.
Stock to Consider
A better-ranked stock worth considering is Facebook, Inc. , sporting a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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Gigamon Hits 52-Week High on Strong Q1 & Security Vertical
Shares of Gigamon Inc. hit a new 52-week high of $38.59 on Jun 22, eventually closing at $38.24. The stock has delivered a strong one-year return of 12.8% and a year-to-date return of 43.9%. The average trading volume for the last three months aggregated approximately 518.37K.
What is Driving the Stock Upward?
Gigamon’s shares have been on the rise ever since the company declared better-than-expected first-quarter fiscal 2016 results on Apr 29, 2016.
The company posted adjusted earnings of 8 cents, which came ahead of the Zacks Consensus Estimate of 4 cents. Also, the bottom line fared better than a loss of 2 cents per share reported in the year-ago quarter.
Gigamon’s revenues of $67.2 million increased 43% from the year-ago quarter and surpassed the Zacks Consensus Estimate of $62 million.
According to the CEO of Gigamon, Paul Hooper, "Security continues to be a significant growth driver for us representing over 60% of our transactions this quarter." He also said, “The strength in this vertical in combination with accelerating growth in our Mobility market addressing the needs of Service Providers around the globe, delivered an all-time high revenue result."
With respect to earnings surprise, this Zacks Rank #3 (Hold) stock has surpassed the Zacks Consensus Estimate in three out of the last four quarters with an average surprise of 100%.
An overall positive trend resulted in upward estimate revisions for Gigamon. Over the last 60 days, all the three estimates for Gigamon were revised upward for fiscal 2016. The Zacks Consensus Estimate for fiscal 2016 went up 23.1% (9 cents) to 48 cents per share.
Going forward, Gigamon’s product launches will continue to drive growth at the company. The GigaSMART and GigaVUE-HC2 platforms are witnessing increased adoption. Moreover, the company is adding clients, which should boost its financial results.
However, in addition to intensifying competition from Juniper Networks Inc. (JNPR - Free Report) and Cisco (CSCO - Free Report) , the company is witnessing pricing challenges. Therefore, to retain market share, Gigamon may have to lower the prices of its products and services, which will, in turn, hurt its profitability.
Stock to Consider
A better-ranked stock worth considering is Facebook, Inc. , sporting a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>