Jefferies Initiates Coverage On SolarWinds With A Buy Rating

According to Jefferies, SolarWinds (NYSE: SWI) coverage is initiated with a Buy rating.

Jefferies said that SolarWinds will continue to benefit from secular growth trends and distribution advantages in its core network management market, while it remains early in its expansion to ancillary product and geographic markets. “We initiate coverage with a Buy; our $27 price target is based on 25x our CY12E earnings of $1.07; our target multiple is in line with the company's average forward P/E multiple and the group multiple, while our DCF puts the shares closer to $32.”

SolarWinds closed yesterday at $22.70.