UPDATE: J.P. Morgan Initiates Coverage on Barracuda Networks with Overweight Rating, $25 PT on Unique Franchise, Positive Outlook

In a report published Monday, J.P. Morgan analyst Sterling Auty initiated coverage on

with an Overweight rating and $25.00 price target. In the report, J.P. Morgan noted, “We are initiating coverage on Barracuda Networks with an OW rating and Dec-14 price target of $25. Over the last ten years, Barracuda, has built a unique franchise in security and storage focused on using a vertically integrated business combined with a hybrid high velocity inside sales/channel model to serve the small-medium sized business (SMB) space. The space suffered through the downturn, but Barracuda has increased its investments in its solutions and is starting to see the acceleration in demand that we think can be bolstered in a stronger economy. This acceleration is leveraging recent investments that we believe will drive a free cash flow CAGR of 30% from CY14-17.” Barracuda Networks closed on Friday at $20.70.