UPDATE: Oppenheimer Initiates Aruba Networks at Outperform on Positive Trends

Oppenheimer initiated coverage on Aruba Networks

with an Outperform rating and a $25 price target. Oppenheimer commented, "We see several positive trends supporting our rev. projections (+20.3% in '13 and +19.3% in '14), including exploding data usage and accelerating adoption of enterprise mobility (corporate-issued and BYOD). We're positive on Aruba extending its reach to the fast-growing SMB market (+20% CAGR '12-'16E) and view its ClearPass software as potentially transforming. ClearPass opens the broader networking market to Aruba at effectively 100% GM, while pulling through incremental equipment sales. We're not modeling this transformation but see good potential for its long-term realization. Meanwhile, economies of scale are driving operating leverage and supporting EPS growth from $0.80E in '13 to $0.99E in '14." Aruba Networks closed at $20.79 on Monday.