JMP Securities Reiterates Market Outperform Rating, $22 PT on Continued Momentum on Share Gains and New Product Sales

In a report published Tuesday, JMP Securities analyst Erik Suppiger reiterated a Market Outperform rating and $22.00 price target on Aruba Networks ARUN. In the report, JMP Securities noted, “We reiterate our Market Outperform rating and $22 price target on Aruba Networks as our channel checks suggest sales momentum was strong in F1Q14, and we are raising our F1Q14 estimate to EPS of $0.14 on revenues of $158.6M from the same earnings on revenues of $157.6M. The company reports results on Thursday, November 21 and our prior estimate was in line with consensus. We also believe the company's F2Q14 guidance will be at least in line with the consensus estimate for EPS of $0.16 on revenues of $166M, and we are bumping up our estimate to match consensus. In addition, we feel that management will reaffirm its target for generating 20% growth in 2H14 and 20% operating margins in F4Q14. Given that ARUN traded off 10% yesterday on cautious comments from other analysts, we feel the pull-back represents a buying opportunity. We feel that shares are attractive at 19x our CY14 EPS as the company is re-accelerating its growth back to 20%, and we believe it will trade at a premium to its growth. Our channel checks suggest demand was healthy during the quarter, especially for the company's new access management and mid-range solutions - the ClearPass and Instant product lines.” Aruba Networks closed on Monday at $16.75.