Important Notice Regarding Fundamental Analysis of Nimble Storage, Inc.

The stock of Nimble Storage, Inc. (Ticker: NMBL) is no longer publicly traded and cannot be analyzed in a traditional fundamental analysis.

Nimble Storage, Inc. was acquired by Hewlett Packard Enterprise (HPE) in 2017. Therefore, the company's financial performance and fundamental value are now fully integrated into HPE's Enterprise Group (now part of the HPE Storage division).

A fundamental analysis of NMBL stock would only cover the company's performance before the acquisition. Below is an article detailing the fundamental reasons behind the acquisition and the value Nimble Storage brought to its acquirer.

Important Notice Regarding Fundamental Analysis of Nimble Storage, Inc.

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The Fundamental Case for Acquisition: Analyzing Nimble Storage, Inc. (NMBL) Prior to its Purchase by HPE

Nimble Storage, Inc. was a key player in the next-generation enterprise data storage market before its acquisition by Hewlett Packard Enterprise (HPE) on April 17, 2017. The transaction valued the company at $1.0 billion in cash, or $12.50 per share, plus the assumption of unvested equity awards.

The fundamental analysis of Nimble Storage, Inc. was not about stable profitability, but about disruptive technology and rapid growth potential in a high-demand sector.

I. Business Model and Strategic Value

Nimble Storage specialized in predictive flash storage solutions, offering both all-flash arrays (AF-Series) and hybrid flash arrays (CS-Series). Its core fundamental value lay in two areas:

A. The Adaptive Flash Architecture

Nimble’s hybrid arrays combined the speed of solid-state drives (SSDs) with the cost-efficiency and capacity of traditional hard disk drives (HDDs). This Adaptive Flash architecture was highly disruptive, allowing customers to dynamically allocate performance and capacity based on workload needs. This catered to the high-growth, mid-range storage market, an area where HPE sought to strengthen its position against rivals like Dell EMC.

B. InfoSight Predictive Analytics

The single most valuable fundamental asset of Nimble was its cloud-based InfoSight platform. This proprietary system used predictive analytics and machine learning to monitor the entire installed base of Nimble arrays globally.

• Operational Excellence: InfoSight was a true game-changer. Nimble fundamentally claimed that InfoSight could automatically detect and resolve 90% of technical support issues, guaranteeing "six nines" of availability (99.9999%).

• Strategic Rationale for HPE: For HPE, InfoSight was the crown jewel, offering a unique opportunity to integrate advanced, proactive data management across its entire storage portfolio, including its flagship 3PAR systems. This was a critical technological component needed to simplify Hybrid IT management for its large enterprise customer base.

II. Financial Performance and Growth (Pre-Acquisition)

While Nimble was a growth company operating at a loss, its fundamental metrics demonstrated high momentum and operational efficiency improvements:

Metric (Fiscal Year 2017, TTM)	Value	Fundamental Insight
Total Revenue	Million	Demonstrated strong year-over-year growth (approximately 25% to 30%), a key metric for a young technology firm.
Net Loss	Million	Nimble was prioritizing market share growth and product development (R&D) over immediate profitability, a common strategy for disruptive tech IPOs.
Cash and Equivalents	Varied, but sufficient for operations	The company had secured significant funding, including a successful IPO, indicating investor confidence in its long-term potential.
Customer Base	Over 10,000 customers	A rapidly expanding customer base validated the market demand for its predictive storage technology.

The fundamental analysis pointed to a high-growth company with strong top-line expansion and a breakthrough intellectual property (IP) in InfoSight, but which had yet to prove its path to sustained profitability. This profile made it an ideal acquisition target for a larger, established company like HPE, which could absorb the losses while leveraging the technology for a massive return.

III. Valuation Context at Acquisition

At the time of the acquisition, traditional valuation multiples like the Price-to-Earnings (P/E) ratio were irrelevant due to Nimble's net loss. Analysts instead focused on the Price-to-Sales (P/S) ratio and the strategic premium:

• P/S Ratio: Based on the $1.0 billion net cash purchase price and approximately $400 million in revenue, the P/S ratio was around 2.5x.

• Strategic Premium: The acquisition price represented a substantial 45% premium over Nimble's stock price just before the deal was announced. This large premium fundamentally reflected the high value HPE placed on Nimble's InfoSight IP and the immediate access to its specialized team and customer base, which would accelerate HPE's entry into the next-generation flash market.

In essence, HPE paid a strategic price for a high-growth company that possessed the key technology (predictive analytics) necessary to revolutionize its own core storage business and stay competitive in the rapidly evolving hybrid IT landscape. The fundamental analysis of the stock thus ended with its successful merger into a larger entity.