Auriga Starts Riverbed Technology (RVBD) at Hold; View Stock as Fully Valued at Recent Levels

Auriga initiates coverage on Riverbed Technology (NASDAQ: RVBD) with a Hold. PT $29.00.

Auriga analyst said, "While we see improving near-term trends on favorable enterprise/public sector spending environment and like RVBD's current positioning in its core WAN Optimization segment, we are concerned longer-term top-line growth rate could slow to 15%-17% CAGR over next five years due to a higher revenue base, unfavorable industry trends, i.e. Virtual Desktop Infrastructure (VDI), and increased competition from Cisco (Nasdaq: CSCO)(Buy). In our view, RVBD remains the clear market share leader in WAN Optimization for Data Center-Remote Branch due to its technological lead and stellar execution. But conversations with industry experts suggest CSCO has narrowed the technology lead with recent offerings. We also expect WAN Optimization's longer term value to decline for customers as VDI reduces the need for application optimization. We like the company's newer initiatives, but expect the story to revolve around WAN Optimization for the next five years."

For an analyst ratings summary and ratings history on Riverbed Technology click here. For more ratings news on Riverbed Technology click here.

Shares of Riverbed Technology closed at $27.98 yesterday.

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