UPDATE: Wedbush Securities Reiterates Outperform Rating, Raises PT on Aruba Networks

In a report published Friday, Wedbush Securities reiterated its Outperform rating on Aruba Networks ARUN, and slightly raised its price target from $20.00 to $21.00. Wedbush noted, “We maintain our OUTPERFORM rating given solid FQ4 results in a difficult spending environment. FQ4 results exceeded the high end of guidance, beating both our estimates and consensus in a challenging spending environment. Strength in the quarter was driven by strength in education, government, and health care verticals, as well as in general enterprise. In addition, GM of 73.6% topped guidance on mix, deferred revenue grew 50% y/y, and OM grew 110bps q/q to 21.7%. FQ1 revenue and EPS guidance was in line with expectations, reflecting caution on Southern Europe and some uncertainty in federal, in our view. While we are concerned about near-term macroeconomic headwinds, we believe the company remains well positioned given its ability to maintain high growth and market share. With a 20% short interest, we anticipate the stock will bounce on a quarter which was better than anticipated. We continue to like the secular tailwinds, the company's positioning and believe long-term investors should own the name. However, we advise investors to wait for a pullback given the potential near-term volatility which is expected.” Aruba Networks closed on Thursday at $16.92.