Auriga Reiterates a 'Buy' on Blue Coat Systems (BCSI); Fundamentals Look to Have Bottomed

October 20, 2009 7:26 AM EDT

Auriga reiterates a 'Buy' rating on Blue Coat Systems (Nasdaq: BCSI), raises price target to $28 from $20.

Auriga analyst says, "Fundamentals look to have bottomed, with certain enterprise verticals appearing to have snapped back from depressed levels. This, coupled with solid product refreshes, has us raising our FY10 estimates. Longer term, we think Blue Coat’s dominance in the secure gateway space and WAN optimization leaves the company well-positioned to capitalize on industry growth prospects. With the stock trading below its historical P/E averages, we consider the shares attractive at current levels.

"Mid-quarter checks suggest upside to our FY10 estimates. Our mid-quarter checks point to a clear bottoming process in virtually all product segments and geographies. We see a solid resurgence of order patterns broadly across the enterprise and federal markets...Model changes. FQ2E:10 and FQ3E:10 revenues/pro forma EPS (excluding stock-based comp, ex-items) go to $121M/$0.27 and $126M/$0.31 from $119M/$0.25 and $124M/$0.29, respectively. Our FY10 estimates rise modestly to $495.7M/$1.15 from $489.4/$1.09."

To see more analyst ratings on BCSI Click Here.

Blue Coat Systems, Inc. engages in the design, development, and sale of proxy appliances, and related software and services that optimize and secure the delivery of business applications and other information to distributed users over a wide area network (WAN) or the public Internet/Web.

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