Ixia Started At 'Buy' By DA Davidson: Here's Why

In a report published Thursday, DA Davidson analyst Mark Kelleher initiated coverage of

with a Buy rating and a price target of $17. "Over the past year and a half the company has faced significant organizational hurdles that originated when former CEO, Vic Alston, was found to have falsified academic qualifications and was forced to resign. That, in turn, triggered an internal audit, which then delayed several SEC filings," analyst Mark Kelleher wrote. A new CEO and new CFO are now in place and Ixia is current with all its SEC filings. Ixia can now focus exclusively on driving the company forward. "We believe, as Ethernet advances to faster speeds, the demand for, and requirements of, fast high-end testing solutions such as those offered by XXIA will continue to grow at a rapid rate," Kelleher said. The network test equipment market accounted for 71 percent of the company's revenue last quarter, the balance being contributed by the network visibility market. "We believe the Network Visibility Solutions division will continue to grow faster than other product lines, and continue to increase as a percentage of overall revenue," Kelleher added. In the report DA Davidson noted, "XXIA's visibility and security functions are offered in virtual deployments, addressing the rapidly growing Network Function Virtualization (NFV) market. Providing network capabilities independent of underlying hardware logically extends server virtualization higher in the ‘network stack', and can reduce a customer's dependence on dedicated hardware appliances."