Sunday, May 25, 2014

Seeking Alpha: Aruba Networks Still Searching For Margin Leverage

It's always something with Aruba Networks (ARUN) and its shares. If investors aren't worried about competitive share loss to Cisco (CSCO), there are worries about smaller rivals like Meru (MERU) or Aerohive (HIVE). If competition isn't a problem, then questions about the company's ability to generate attractive long-term operating leverage come back into play. I don't mean to suggest that these aren't all relevant and important questions. My point is rather to offer some reason as to why these shares are often so volatile around earnings reports.

As it looks today, I continue to believe that Aruba is undervalued, with fair value in the low-to-mid $20s. I really would like to see more evidence of sustained operating leverage before buying in myself, but by the time that's evident the shares are likely to have already had their run.

Read the full article here:
Aruba Networks Still Searching For Margin Leverage

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