UPDATE: UBS Downgrades Aruba Networks (ARUN) to Neutral, Sees Limited Upside

April 4, 2013 7:28 AM EDT Send to a Friend
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Price: $20.05 --0%

Rating Summary:
    19 Buy, 15 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 22 | Down: 23 | New: 13
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(Updated - April 4, 2013 11:12 AM EDT)

UBS downgraded Aruba Networks (NASDAQ: ARUN) from Buy to Neutral. Analyst Amitabh Passi described the company as "structurally sound”, but said he sees limited upside at current levels.

"We foresee upside risk to $28-30/sh and downside risk to $18-20/sh and find risk-reward balanced," said Passi.

"We also find the increasing levels of stock option expense an incremental source of angst with option expense now at $100m/year annualized or 25% of opex, up from 18% 3 years ago. While we forecast non-GAAP EPS of $1.08 for CY14 ex-options, our EPS estimate including option expense is only $0.53. With near-term focus on re-investing in the business as well in R&D and S&M, we foresee limited operating leverage," added the analyst.

For an analyst ratings summary and ratings history on Aruba Networks (NASDAQ: ARUN) click here. For more ratings news on Aruba Networks click here.

Shares of Aruba Networks closed at $23.53 yesterday.


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