Riverbed Technology Shares Got Crushed: What You Need to Know
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of WAN acceleration specialist Riverbed Technology (NAS: RVBD) plummeted 22% today after its current-quarter guidance came in well below Wall Street expectations.
So what: While Riverbed's fourth-quarter profit jumped an impressive 53%, a disappointing first-quarter outlook -- management sees revenue of $183 million to $187 million versus the consensus of $197 million -- is reinforcing market concerns about rapidly slowing growth. The shares took off like a rocket in 2010, but forecasts of a cooling WAN market now have plenty of investors questioning Riverbed's growth potential.
Now what: I'd look into this plunge as a possible buying opportunity. "We believe we are in the strongest strategic and competitive position in our history," CEO Jerry Kennelly said. "Adding to that, early in 2012 we will be entering what we think will be Riverbed's most exciting and important product cycle yet." With the stock now down 47% from its 52-week highs, it might be a good time to bet on that tailwind.
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At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of and writing covered calls in Riverbed. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.
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