Barracuda Shares Gain 8% Following Strong Q1 Results, Bank of America Sees Additional 31% Upside

Shares of

are up 8.5 percent to $30.06 in Friday's pre-market trading following

The strong report spurred an upgrade from Neutral to Buy by Bank of America. Analyst Ral Liani maintained the $39.50 price objective, representing 31 percent upside from current levels. From the earnings report, the most important part to Liani was “sustainability, where investment in channels and products are paying off in the key focus areas.” Seventy percent of total subscriptions come from storage & network and applications security which grew 34 and 25 percent respectively, said the analyst. According to Liani, Barracuda “only carries a minuscule share of big markets (security, storage, ADC, and WAN Op markets), with disruptive pricing as a key differentiator and a high degree of recurring revenues.” Company execution is the biggest risk to Liani's thesis, “both on the fronts of new product launches as well as go-to-market strategy.”