Has Riverbed Technology Hit Rock Bottom?

Originally Published In the News April 25 2008 10:10 AM
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If you have been looking to get long Riverbed Technology (RVBD-NASDQ) there is probably no time like the present. I mused a while back that it might be worth a look in the mid-teens; did the stock overshoot on the downside?

Earnings are out and the stock is finally bouncing, perhaps due to a management team that is finally realistic about their end markets:

During Q1, we saw a decrease in the closed rates on larger sales while smaller sales seem to be approved and closed at a normal rate. Overall, deals are closing but we did see some customers delay in the final approval process or making smaller initial purchases. This is most notable for new customers as revenues from our existing installed base grew modestly from the prior quarter.

Even in this tougher environment, we see a number of reasons why we are confident that we can continue to grow our business. First, our pipeline of new opportunities is strong and continues to grow at a very fast rate. We believe that this interest in wide area data services has never been higher and this is reflected in the number of prospective business opportunities we’re seeing. Second, our Q2 has typically been a seasonally stronger period. Third, we remain the recognized technology and market leader. Our competitors rarely beat us in head-to-head competitions. Conference Call Transcript

The rumors that Cisco would be buying the company have been dormant; perhaps it was a trader at Schottenfeld that was behind those untruths as well. The stock’s valuation is as attractive as it has been since the IPO; and small cap growth investors should at least kick the tires of the former high-flier.

Riverbed Technology, Inc. Q1 2008 Earnings Call Transcript
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