Hockey Stick Trips Up Riverbed Bulls

Originally Published In the News February 6, 2008 8:55 AM

The decline in the shares of Riverbed Technology (RVBD-NASDAQ) today should provide investors today with something the investment thesis has lacked since the stock began trading publicly, namely a reasonable valuation. Of course, with management back end loading the financial results for 2008, it appears the SellSide, who generally adored the stock at twice the current quote, will take a pound of flesh out of the stock today in fit of rage that seems a bit hissy. Needham downgraded from buy to hold, Piper Jaffray is taking the stock off their “Alpha” list and the rest of the street is taking a chainsaw to their price targets.

Jefferies is cutting their price target to $18 from $36, but Robert Baird sums it up best, as they are moving to the sidelines as near-term catalysts appear elusive.

Growth stock investing can be an exciting endeavor, but often leaves you uneasy given the excessive valuations you have to contend with. We are finally calling and end to this poker game, and the shorts walk away with the pot o’ money.

Hold ‘em
February 8, 2007
The pot continues to build in the stakes for Riverbed Systems (RVBD-NASDAQ). This story offers up excitement in spades...high-profile VC’s, hyper growth end-markets and solid sponsorship.

If this one doesn’t get your juices flowing nothing will…

But we finally have witnessed a nasty bout of multiple compression, and will revisit the the stock in the mid-teens, assuming the planets align and it finally looks good long. Buy low, sell high.

Riverbed Q4 Tops Estimates; Q1, 2008 Rev Guidance Beats Estimates; But Stock Slides; Margin Worries?
Tech Trader

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