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Storage Space: The Case of Nimble

Remember when the iPod mini capacity was 1GB? Remember when 200 GB was an enormous amount of memory on a laptop? Remember how a single computer in the 60's took up an entire room?

As our technology grows, the need for more efficient storage solutions increases, and these days many companies compete to offer storage solutions for companies and individuals that are more efficient. Many companies compete in this space, but today I want to focus on one that I found a few months ago and that's been getting hammered on stock market on no substantial news. That company is Nimble Storage ($NMBL).

What Is Nimble Storage?

Founded in San Jose, California in 2008 by Varun Mehta and Umesh Maheshwari, Nimble Storage is a flash storage solutions company. It went public on the NYSE on December 13th, 2013, with an IPO placed at $21 per share. Today, the company is trading at around $23 per share.

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Their Home Page

Per their "about page" :

Nimble Storage is redefining the storage market with its Adaptive Flash platform. Nimble’s flash storage solutions enable the consolidation of all workloads and eliminate storage silos by providing enterprises with significant improvements in application performance and storage capacity. At the same time, Nimble delivers superior data protection, while simplifying business operations and lowering costs. At the core of the Adaptive Flash platform is the patented Cache Accelerated Sequential Layout (CASL) architecture and InfoSight, an automated cloud-based management and support system that maintains storage system peak health. More than 4,300 enterprises, governments, and service providers have deployed Nimble’s flash storage solutions across 38 countries

Products

Essentially, through the aforementioned philosophy, Nimble Storage has managed to create some very efficient products. Namely, these products use CASL, a flash-optimized file system software and Infosight, a cloud based management/support system to deliver these key benefits:

Key Benefits

Performance and Capacity

  • Virtual Desktop Scalable Storage and Performance CapacityFlexible scaling of storage resources to satisfy the changing demands of business-critical applications
  • Five times greater performance and capacity density than legacy storage systems
  • Up to a 75% reduction in data footprint, and a 10x reduction in datacenter rack space

Seamless Scalability

  • Non-disruptive and independent scaling of performance and capacity, within a single array or a cluster

Integrated Data Protection

  • As many as 90 days of hourly snapshots on a single array
  • WAN-efficient replication of snapshot data for disaster recovery

Proactive Wellness

  • Peak storage health driven by powerful data sciences
  • Greater than five nines system uptime

Now, I'm not a data storage expert, but all this does sound good (assuming it is truthful). Considering that they were named the "Storage Vendor of the Year" in 2014 by CRN, a UK magazine on its 21st annual iteration of its awards, it's safe to say that we can trust their assertions.

Additionally, Nimble Storage has an impressive array of customers such as Ask.com, the San Diego Convention Center, Sacramento City College,  the City of Cupertino, and Staples Australia, among many others. Their investor deck does a very good job at explaining their value propositions.

Financials

NMBL 5 day movement

NMBL Balance Sheet

NMBL Balance Sheet (Yahoo Finance)

NMBL Income Statement

NMBL Income Statement (Yahoo Finance)

NMBL Stats

NMBL Key Statistics (Yahoo Finance)

For me, what stands out is the Y/Y quarterly revenue growth, which stands at 76.9%, but clearly, this company is still a ways away from being profitable. The question that remains is when will it be able to achieve this?

What do you guys think? Is this a noteworthy investment or opportunity? Let us know in the comments or by joining the conversation here.

Disclaimer: I actually hold positions in Nimble, but this does not constitute investment advice.

 

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Laurent Hesnard

writer

A cautious but optimistic observer of the market, Laurent enjoys finding investment opportunities that might disrupt their respective industries. He also has a passion for helping others learn about the inner workings of the markets in order to achieve their financial independence. As the Marketing Manager at SprinkleBit, Laurent gets to live out that passion everyday.

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