New Top Team Boosts Imperva

03/04/2015 6:00 am EST

Focus: STOCKS

Rob DeFrancesco

Founder, Tech-Stock Prospector

While short-term focused traders want instant gratification every quarter, the small-cap recommendation is way more concentrated on the long-term—getting growth back on track and building out its cloud business—explains Rob DeFrancesco, editor of Tech-Stock Prospector.

Imperva (IMPV) is a data center security solution firm. A careful listen to its Q4 earnings call reveals management was holding back a bit when it issued 2015 revenue guidance of $195 to $200 million (growth of 19% to 22%), below the consensus estimate of $200.4 million.

The simple fact that Imperva is guiding to 2015 midpoint revenue growth of 20.5%—only slightly above the 2014 growth rate of 19%—indicates that there is room for upside surprises.

If Imperva can deliver revenue growth of 19% in an extremely tough year like the last one, it is capable of big improvements in 2015.

Just the installed base alone of 3,700 customers represents plenty of potential because less than a third of its accounts have bought more than one of its products.

Meanwhile, a lot of the top team is fairly new to the company and doesn't want to disappoint. Imperva also has a new chief marketing officer as well as new VPs of sales for the US East and West Coasts.

CEO Anthony Bettencourt only joined last August, while Mike Mooney, the chief revenues officer, was hired in October. Mooney, a veteran of Hewlett-Packard Autonomy unit, has more than 25 years experience leading and building enterprise sales organizations. He has already made meaningful changes here.

One key revision is a new sales force compensation plan meant to boost both product and subscription sales. While subscription revenue in 2014 accounted for just 14% of total revenue, it expanded 107%.

The company continues to add customers at a rapid clip, bringing on a record 245 new accounts in the latest quarter.

With the expectation bar reset downward going into an easy comp period, Imperva is positioned to start stringing together beat-and-raise quarters, something that would be appreciated by both short- and long-term investors.

Subscribe to Tech-Stock Prospector here...

More from MoneyShow.com:

Internet of Things Lifts Skyworks

RingCentral: A Big Idea

Social Media, iPhones, and Online Security

Related Articles on STOCKS