UPDATE: Piper Jaffray Initiates Coverage on Aruba Networks with Overweight Rating, $26 PT on Good Market Position

In a report published Wednesday, Piper Jaffray analyst Troy D. Jensen initiated coverage on Aruba Networks ARUN with an Overweight rating and $26.00 price target. In the report, Piper Jaffray noted, “We are initiating on Aruba Networks with an Overweight rating and $26 price target, based on 22x our CY15 operating income assumption plus cash. In our view, Aruba is one of the better positioned companies to take advantage of the upcoming BYOD/Mobility cycle, which we expect will translate to accelerated product growth over the next several quarters. We expect further penetration into an otherwise underpenetrated market, as Gartner forecasts the WLAN market to grow at a 15.6% CAGR through 2017. We believe Aruba's broad portfolio of both controller and controller-less technology, coupled with leading software solutions, will translate to further share gains in 2014, implying additional upside to street estimates. The company is now entering a period of easy comps and expanding margins, which we believe will ultimately result in multiple expansion.” Aruba Networks closed on Tuesday at $17.51.