While F5 Networks (FFIV) doesn't operate in the same space as Riverbed Technology (RVBD) the simplistic herd has pushed these 2 stocks into the same space due to 'cloud' or 'mobile internet' exposure. Therefore the implosion of the former stock after earnings in the past week, lowered the bar (and stock price) for Riverbed Technology. At its worst, RVBD dropped 20% from peak to trough in reaction to the FFIV report. Indeed I wrote Monday that the deflation in 'related' stocks due to FFIV could create the potential for upside surprises in other stocks that are associated (rightly or wrong) to that company.
The issue in all these names is not performance - they are all doing excellent; it is all about trying to beat heightened expectations and somehow fitting into the increasingly elevated valuations.
31 analysts were in for $158.6M in revenue and $0.18 EPS. Riverbed came in at $165.4M and $0.19 - a slight beat, but it seems to be enough for the market, especially with the drop in stock price. It is likely this would not have been the case if the stock was at $40+ and the weak hands had not been shaken out. Guidance for next quarter came in at 18 cents a share, on revenue of $159-$161 million, both slight upgrades to current consensus. Full report here.
As to valuation the stock has (non GAAP) EPS of $0.77 estimates for end of year 2011, so we'll call it 80 cents. This gives a very pricey 44x forward estimates for a company which is going to be facing much more difficult year over year comparisons in the year ahead.
[Apr 23, 2010: Riverbed Technology Earnings Report Pleases the Street]
[Feb 11, 2010: IBD - Riverbed Technology: Making the Network Faster Pays Off]
[Jun 29, 2009: Even Handed Story on Riverbed Technology on CBSMarketwatch]
[Apr 8, 2009: Stimulus Fire Hydrant (Worldwide) Should Benefit Networking Companies / Broadband]
[Nov 27, 2007: Riverbed Technology - Fortune Article]