UPDATE: Imperial Initiates Coverage On Aruba Networks

Imperial Capital initiated coverage of

with an Outperform rating and a price target of $23. Imperial Capital analyst Ashok Kumar sees Aruba Networks as an innovator in enterprise LAN and security. Kumar notes that Aruba is second to

, and it is the only other vendor besides Cisco with double-digit market share. Kumar believes Aruba Networks can benefit from customers migrating from fixed-to-wireless-network connections. Due to Aruba Networks technology differentiation, Kumar says the company can maintain growth above market rates. Kumar says the target price represents a 17 percent upside to its recent share price, based on a valuation multiple assumes that revenue growth can be sustained in the 15-20 percent range and operating margins could recover to 20 percent. Aruba Networks shares were last up 0.25 percent at $19.68 in Tuesday afternoon trading.