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What to Expect from Nimble Storage (NMBL) in Q3 Earnings?

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Nimble Storage, Inc.  is set to report third-quarter fiscal 2017 results on Nov 22. Last quarter, the company delivered a positive earnings surprise of 4.08%. However, the company posted an average negative earnings surprise of 0.82% in the last four quarters.

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 is equally concentrating on growing its mid-size customer base. In the second quarter, its customer base grew 43% while AFA bookings constituted 17% of total bookings in the quarter.

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 remain wary of the stiff competition from existing players like EMC and Pure Storage, Inc. (PSTG - Free Report) , which might weigh on Nimble’s margins.

For the third quarter, the company expects revenues in the range of $100 million to $103 million. Non GAAP operating loss is expected to be $14 million to $16 million. Non-GAAP loss per share is projected in the range of 17 cents to 19 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 ESP and 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 48 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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.

NIMBLE STORAGE Price and EPS Surprise



Stocks to Consider

Here are a couple of 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

PVH Corp. (PVH - Free Report) with an Earnings ESP of +0.42% and a Zacks Rank #2.You can see the complete list of today’s Zacks #1 Rank stocks here.

Burlington Stores, Inc. (BURL - Free Report) with an Earnings ESP of +6.06% and a Zacks Rank #2.

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