A10 Networks (ATEN) Shares Could Double - Pacific Crest

Pacific Crest maintained a Overweight rating on A10 Networks (NYSE: ATEN) and raised its price target to $11.00 (from $10.00). Analyst Brent Bracelin noted a strong rebound in Americas contributed to Q2 revenue upside, and he said the turnaround could "justify a double to $11."

"Revenue increased 8% q/q to $47.5 million, exceeding consensus of $45.9 million. Upside came from a 20% q/q snapback in the Americas, in part driven by a ~$6 million CGN order with an existing U.S. service provider customer. Enterprise also remained healthy, rising 10% q/q, but flattish y/y on tough comparisons," said Bracelin.

"Our bull thesis is based on :(1) revenue acceleration in 2H15, (2) TAM expansion into security, (3) continued enterprise momentum, (4) a return to profitability in late 2016 and (5) a compelling risk/ reward with the potential to double to $11. Our new price target of $11, up from $10, is based on the assumption that the trough EV/S of ~1.3x expands to ~2.8x in the coming year as the turnaround materializes. Comparable peers are currently valued at ~3.0x," added the analysts.

For an analyst ratings summary and ratings history on A10 Networks click here. For more ratings news on A10 Networks click here.

Shares of A10 Networks closed at $5.43 yesterday.

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