UPDATE: FBN Securities Upgrades Aruba Networks to Outperform; Pullback Improves Risk/Reward

FBN Securities raises its rating on Aruba Networks

from Sector Perform to Outperform, but lowers its price target from $24 to $18. FBN Securities comments, "We are upgrading shares of ARUN from Sector Perform to Outperform and lower our PT from $24 to $18. As we publish this note, shares are trading near $14, which we see as a good entry point. The stock has declined about 30% over the past month, it is still guiding for revenue growth of about 20% (~27% adjusted for the lower China service provider business than a year ago) in FQ4, it has~ $3 of net cash/share (~20% of the stock price), and opex leverage continues (opex% is now 52% vs. 55% a year ago). On the negative side, the company's momentum, like others in the networking industry, has slowed, while its growth premium over CSCO declined from 26% a year ago to only 4%." ARUN closed at $15.30 on Thursday.