Violin Memory Inc (VMEM) Stock Takes Huge Hit After Earnings Miss

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Violin Memory Inc (NYSE:VMEM) shares are trading down significantly in morning trading after the company reported an earnings miss. The Silicon Valley-baed company that specializes in creating data storage products reported a Q3 EPS of $0.19, which came in 1 cent higher than what the Street had expected.

Violin Memory Inc (NYSE:VMEM) reported revenue for the quarter of just $112.5 million which fell well below Wall Street’s prediction of $17.23 million. The company is now being forced to figure out ways to increase the value for shareholders, a task which certainly won’t be easy.

“Our strategic shift and product line transition to become a market leader in flash-based primary storage for enterprises continues to create short-term challenges in achieving predictable, consistent growth. However, we believe we are headed in the right direction overall and that our opportunity continues to be extremely attractive,” said Kevin DeNuccio, president and chief executive officer, Violin Memory.

The stock is down 20.61% or $0.27 following the news, hitting $1.04 per share. Approximately 203,056 shares traded hands. VMEM shares have declined 61.58% since April 30, 2015 and are currently downtrending. It has underperformed the S&P500 by 61.30%.

From a total of 2 analysts covering Violin Memory (NYSE:VMEM) stock, 0 rate it a “Buy”, 0 a “Sell”, and 2 a “Hold”. This means that 0 of the ratings are positive. The highest target price is $6.0 while the lowest target price is $2. The mean of all analyst targets is $2.13 which is 104.81% above today’s ($1.04) stock price. Violin Memory was the topic of 4 analyst reports since August 28, 2015 according to the firm StockzIntelligence Inc. Maxim Group downgraded shares on November 16 to a “Hold” rating.

The institutional sentiment increased to 1.77 in Q2 2015. It’s up 0.26, from 1.51 in 2015Q1. The ratio is positive, as 20 funds sold all their Violin Memory Inc shares they owned while 11 reduced their positions. 13 funds bought stakes while 42 increased their total positions. Institutions now own 32.91 million shares which is 6.96% more than the previous share count of 30.77 million in 2015Q1.

Lamond Capital Partners Llc holds 9.79% of its total portfolio in Violin Memory Inc, equating to 3.93 million shares. S Squared Technology Llc owns 489,138 shares representing 1.29% of their total US portfolio. Moreover, Adirondack Research & Management Inc. has 1.21% of their total portfolio invested in the company, equating to 1.34 million shares. The North Carolina-based Global Endowment Management Lp has a total of 0.8% of their portfolio invested in the stock. Highland Management Partners Vii Llc, a Massachusetts-based fund reported 473,093 shares owned.

Since March 12, 2015, the stock had 7 insider purchases, and 0 selling transactions for a total of $339,007 in net activity. Mahadevan Vivekanand bought 3,000 shares worth $4,570. Sindelar Cory bought 10,000 shares worth $14,800. Nottenburg Richard N bought 25,000 shares worth $36,875. Antoun Georges bought 66,000 shares worth $97,667. The insider Walrod David B bought 35,000 shares worth $52,129.

Violin Memory, Inc. has developed a new class of flash storage solutions that are designed to bring storage performance in-line with applications, servers and networks. The company has a market cap of $99.77 million. The Company’s Flash Storage Platform and All Flash Arrays are specifically designed at each level of the system architecture to leverage the inherent capabilities of flash memory and meet the sustained performance requirements of business-critical applications, virtualized environments and Big Data in the cloud and in enterprise data center. It currently has negative earnings.

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