UPDATE: Bank of America Initiates Gigamon at Neutral on Attractive Long-Term Play

In a report published Monday, Bank of America analyst Tal Liani initiated coverage on Gigamon GIMO with a Neutral rating and $32.00 price target.

In the report, Bank of America noted, “We view Gigamon as an attractive long-term play in the fast growing niche of network traffic visibility, with revenues expected to grow 30-35% p.a. in the next three years. Superior growth is driven by market migration to 10GbE combined with Gigamon's technological leadership. We expect the high revenue growth to lift up operating margins, from 9% in 2013E to 15% in 2015, driving 30-60% EPS growth, accordingly. However, with the stock trading at ~5.4x 2014E EV/Sales, we see limited near-term upside to the stock, based on comparison to other high-growth stocks. Our $32 PO is based on 5.6x 2014E EV/Sales.”

Gigamon closed on Friday at $30.82.