Needham analyst upgrades Aruba Networks shares

AP News
Posted: Dec 15, 2009 1:44 PM

A Needham Co. analyst upgraded shares of Aruba Networks Inc. Tuesday, predicting its revenue and will keep rising next year and strong margins will keep its profit growing, too.

Shares of Aruba Networks, which makes equipment for wireless network providers, dipped 2 cents to $9.08. Earlier, the shares rose as much as 38 cents, or 4.2 percent, to $9.48.

In a client note, Needham analyst Greg Mesniaeff raised his rating to "buy" from "hold" and set a $12 price target for the stock.

He said the company is seeing a large increase in short-term deferred revenue, noting that this rose 15 percent quarter-over-quarter to $40 million in the first quarter of fiscal 2010 _ something that shows "robust pipeline activity and improved visibility."

He also said that since Cisco Systems Inc. and Aruba are capturing the majority of the business in the WLAN _ or wireless local area network _ market, Aruba is turning into the main supplier for companies who need wireless mobility infrastructure but don't want to work with Cisco.