Why Aerohive Networks Inc Shares Plunged, Then Popped Today

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 Aerohive Networks initially plunged more than 10% Friday morning, then recovered to trade up around 4% after the Wi-Fi and cloud-managed enterprise networking specialist released solid first-quarter results.

So what: Quarterly revenue rose 42% year over year, to $28.2 million, which translated to an adjusted net loss of $7.4 million, or $0.97 per share. Analysts, on average, were expecting a significantly wider adjusted loss of $1.32 per share on sales of just $26.1 million.

Now what: Aerohive Networks only held its IPO at the end of March, so its unsurprising to see volatility surrounding its first earnings report as a publicly traded company. Some investors are also worried, as revenue growth appears to be decelerating. For perspective, sales increased roughly 110% year over year in 2012, then by 50% 2013, and roughly 45% in the fourth quarter of last year.

At the same time, Aerohive handily exceeded Wall Street's expectations for Q1, so it's hard to blame the market for bidding up shares today. For now, though, and without a light at the end of the tunnel with regard to Aerohive's losses, I'm still content watching this one from the sidelines.

Warren Buffett just bought nearly 9 million shares of this company
In the meantime, there are plenty of other great stocks in which you can put your money to work. And why not follow the best? For example, imagine a company that rents a very specific and valuable piece of machinery for $41,000... per hour. (That's almost as much as the average American makes in a year!) And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report details this company that already has more than 50% market share. Just click HERE to discover more about this industry-leading stock... and join Buffett in his quest for a veritable landslide of profits!

The article Why Aerohive Networks Inc Shares Plunged, Then Popped Today originally appeared on Fool.com.

Steve Symington has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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 Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story