Analysts Upgrade Aruba Networks Following Solid Q4 Results


Aruba Networks, Inc. (NASDAQ:ARUN) is a Sunnyvale, California based company who develops and sells enterprise wireless LAN and edge access networking equipment that provides access management, network infrastructure and mobility application solutions which allows governments, businesses, and schools to create next-generation mobility networks. The company released its fourth quarter report on August 26th and its results were rather impressive. Since then, the stock has climbed more than 4%.

During its Q4 results, Aruba Networks reported $0.24 Non-GAAP earnings per share, beating analysts’ consensus estimate of $0.23 by $0.01. During the same quarter last year, the company posted $0.13 earnings per share. The company had a profit of $202.90 million for the quarter, compared to the consensus estimate of $194.83 million. Aruba’s quarterly revenue was up 33% on a year-over-year basis. On average, analysts predict that Aruba Networks, Inc. will post $0.76 earnings per share for the current fiscal year.

Aruba Networks’ president and CEO Dominic Orr said, “We achieved significant market share gains, supported by the continued ramp up of our full line of 802.11ac access points as well as strong Instant and Clear Pass sales. The focused execution of our product roadmap underscores the merits of our first-to-market strategy and further strengthens our leadership position.”

Shares of Aruba Networks opened at $22.01 on Wednesday, August 27th. The technology company has a 1-year high of $23.58 and a 1-year low of $15.97. The stock’s daily moving average is $21.68 and has a 50-day moving average of $18.28. The market cap for Aruba Networks is $2.31 billion and its P/E ratio is not applicable.

On August 27thAmitabh Passi UBS analyst upgraded his rating for Aruba Networks from Neutral to Buy and raised his price target from $21 to $25. He noted the company’s higher guidance and “focus on shareholder returns and quality of earnings” and “Increasing evidence of a more rigorous focus on operational discipline, with a surprising cost rationalization program announced for FY15”as his reasons for the upgrade.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Amitabh Passi has a total average return of 8.7% and a 62.2% success rate. Passi is ranked #763 out of 3265 analysts.

Separately on August 27thJ.P. Morgan analyst Rod Hall upgraded his rating for Aruba from Underweight to Neutral with a $21 price target. He reasoned, “We continue to see Cisco as a significant threat to expected earnings growth but the company continues to lose share to Aruba even after rolling out 802.11ac products of their own.” He added, “We continue to see Cisco as a potential threat in the WiFi market. However, with yet another restructuring under way and new threats in their switching market we believe that CSCO’s energy is focused away from WLAN.” Hall has a -1.8% average return on all stocks he has rated and a 42% success rate in making recommendations.

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