NMBL is expected to report fourth quarter earnings tonight after the close. Consensus calls for EPS of ($0.12) vs ($0.13) last year on revenue of $88.2 mln (+29% YoY). The current consensus is within the company's guidance range of ($0.13) -- ($0.11) and revenues of $87-89 mln. 

NMBL shares are down over 55% since it reported Q3 results when the company said there were two developments during that quarter that it believe impacted them. NMBL's investments in building out its large enterprise customer base is making progress, however these investments are taking to materialize. The second issue is the company shifted investments from commercial to large enterprise. 

The first area of interest will be margins.

Las quarter the company reported Q3 Non-GAAP gross margin of 66.9% vs 67.1% in the same quarter as last year. 

The company said it believes its planned investments will improve revenue growth as well as operating leverage over time. The company expects that it will take several quarters to realize the impact of these investments and have factored that into its guidance for Q4FY16.

Options Activity

  • Based on NMBL options, the current implied volatility stands at ~ 112%, which is 34% higher than historical volatility (over the past 30 days). Based on the NMBL March $10 straddle, the options market is currently pricing in a move of ~28% in either direction by weekly expiration (Friday).

Technical Perspective

  • NMBL shares have outperformed the S&P so far this year with NMBL gaining by 17% vs 5% loss in the index. NMBL tends to have 4-6% reactions to earnings. On a positive report, look for resistance near the $8.4, while support sits near $7.4.