Boston, MA 10/28/2013 (wallstreetpr) – In its most recent quarter, Fusion-IO, Inc. (NYSE:FIO) reported hugely in the red with a staggering 27% decline in year over year revenue. The company reported $86.3 million in revenue for Q1.14. As if that was not enough, the datacenter solutions provider went ahead to lose $27.9 million, translating to $0.28 per share in the quarter; a year ago, the company made a net income of $3.9 million. And what followed after this seemingly disastrous quarter posting is that both the marketing chief and the CFO decided to jump ship. Following this lower-than-expected Q1 earnings, the company has also reportedly stopped issuance of the full-year guidance and will instead guide on quarterly basis. The company’s loss of its significant market share is attributed to its lack of visibility.
At its current 2.45x EV/sales, Fusion-io doesn’t look as a dirt cheap company. However, the fear is that these beautifully higher gross margins which surpass its peers might come down soon if the company’s mandarins do not find immediate solution to keep the datacenter solutions provider out of the red zone.
It has to be remembered that Fusion-IO participates in high growth-end markets and also boasts differentiated technologies in the market. Basically, Fusion-io has its balance sheet in good standing and its technology is also high-end. What this means is that the company has enough strengths for rebound. However, acquisition could be its best option out of the red. What is quite tricky is whether the company stands the chance of getting a buyer who is willing to fork a premium for this datacenter solutions provider, if in case it offers itself up for sale.
The stock has remained one of the most speculated on the NYSE platform. At the close of Friday’s trading the $976.12 million cap company moved southward, losing 2.85% to settle down with $9.54.
