It was only nine days ago that investors were left speculating as to whether Aruba's (Nasdaq:ARUN) weak fiscal third quarter meant that the WLAN market was slowing or that rival Cisco (Nasdaq:CSCO)
was gaining share. With Cisco's earnings in hand and Aruba management's
own post-earnings comments, it's clear that Cisco now looms large as a
major disruptive force.
A more aggressive (and successful) Cisco is a multi-faceted threat to
Aruba, and investors aren't hanging around to see how this plays out –
sending the shares down more than one-quarter Friday morning. Although I
continue to believe that there's long-term value in Aruba Networks
shares, investors approaching this stock today have to treat it like
nitroglycerine – be gentle and have a backup plan if and when things go
badly wrong.
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Showing posts with label Motorola Solutions. Show all posts
Showing posts with label Motorola Solutions. Show all posts
Monday, May 20, 2013
Thursday, May 9, 2013
Investopedia: After The Hurricane, Is It Safe To Visit Aruba Networks?
There's a pretty good rule of thumb that applies to swimming and diving –
if you can't see the bottom, don't dive in -- and think twice about
swimming there. Likewise, jumping into a stock right after a significant
revision to earnings expectation can be an invitation for successive
disappointments, as companies don't often miss just one time.
With Aruba Networks (Nasdaq:ARUN), that leads to some tough choices for investors. While I definitely believe that the wireless networking (WLAN) is going to grow significantly, and that Aruba is well-positioned to take more share in the small/medium-sized business (SMB) space, I also acknowledge that WLAN spending is largely discretionary and this company could see further order/revenue disappointments if IT demand doesn't rebound during the summer.
Please read more here:
http://www.investopedia.com/stock-analysis/050913/after-hurricane-it-safe-visit-aruba-networks-arun-csco-rkus-msi-ffiv-rvbd-orcl-ibm-jnpr-hpq.aspx
With Aruba Networks (Nasdaq:ARUN), that leads to some tough choices for investors. While I definitely believe that the wireless networking (WLAN) is going to grow significantly, and that Aruba is well-positioned to take more share in the small/medium-sized business (SMB) space, I also acknowledge that WLAN spending is largely discretionary and this company could see further order/revenue disappointments if IT demand doesn't rebound during the summer.
Please read more here:
http://www.investopedia.com/stock-analysis/050913/after-hurricane-it-safe-visit-aruba-networks-arun-csco-rkus-msi-ffiv-rvbd-orcl-ibm-jnpr-hpq.aspx
Wednesday, January 2, 2013
Investopedia: New Products Could Spark Aruba Networks In 2013
It's easy for value investors to have a love-hate relationship with a stock like Aruba Networks (Nasdaq:ARUN).
The company has been delivering solid revenue growth and the company's
WiFi and WLAN products are well regarded in the market. But the stock
also trades at robust valuations, carries a significant short interest,
and has the pleasure of competing against behemoths like Cisco (Nasdaq:CSCO).
While I would caution investors to take note of the risks involved
here, new products could yet lead Aruba to have a strong 2013.
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Thursday, December 13, 2012
Investopedia: Honeywell Battens Down The Hatches
More and more it's looking like 2013 is going to be a challenging year
for a variety of businesses. While it's convenient (and not entirely
inaccurate) to lay some of this at the feet of the "fiscal cliff,"
it also looks like the strong industrial rally in North America is
petering out, while Europe and China aren't looking strong enough to
take up the slack. With all of that in mind, Honeywell's (NYSE:HON) guidance
update was not all that surprising. Though this remains a generally
underrated conglomerate, the shares don't look like a tremendous bargain
today.
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Sunday, August 26, 2012
Investopedia: Is Aruba Back In A Growth Groove?
Although Aruba Networks' (Nasdaq:ARUN) fiscal third quarter report in May was disappointing (particularly from a guidance standpoint), I liked the stock on a GARP
basis. Oddly enough, while this summer has not been a good one for tech
companies, the stock has been quite strong over the past three months.
While I continue to like the company, I do wonder if Aruba needs to
start showing a little more competitive share growth for the stock to
continue working well into the future.
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Wednesday, May 23, 2012
Investopedia: Can BYOD Bring Aruba Networks Along For The Ride?
This is not a good time to be a tech stock with analyst numbers heading lower, and it's not altogether surprising that Aruba Networks's (Nasdaq:ARUN)
stock is near its 52-week low. Although enterprise mobility is
admittedly not the highest priority for most IT departments, and the
company is seeing deceleration in Europe, this is still a small growing
tech company with the number two share position in an emerging growth market.
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Wednesday, November 23, 2011
Investopedia: Aruba Still A Growth Story In A Growth Market
Even if consumer demand for smartphones and tablets has started to disappoint lately, there is little question that it is still a major emergent trend in enterprise IT. As Aruba Networks (Nasdaq:ARUN) is built upon facilitating wireless access to network resources, it is a good pure play on this secular growth. While worries about enterprise IT spending and reinvigorated competition are relevant in the context of a robust valuation, this is still an interesting tech growth story.
A Solid Start to the Fiscal Year
Aruba is getting its fiscal year off to a solid start. Revenue rose 44% in the quarter and 5% on a sequential basis. Profitability is also fairly good. Gross margin did worsen from last year ((whether generally accepted accounting principles (GAAP) or non-GAAP)), but improved decently on a sequential basis. Operating income was more uniformly positive - the year-on-year GAAP increase being so large as to almost be irrelevant, while the company added almost a point and a half to non-GAAP operating margin on a sequential basis. (To know more about income statement, read: Understanding The Income Statement.)
Read the full piece here:
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A Solid Start to the Fiscal Year
Aruba is getting its fiscal year off to a solid start. Revenue rose 44% in the quarter and 5% on a sequential basis. Profitability is also fairly good. Gross margin did worsen from last year ((whether generally accepted accounting principles (GAAP) or non-GAAP)), but improved decently on a sequential basis. Operating income was more uniformly positive - the year-on-year GAAP increase being so large as to almost be irrelevant, while the company added almost a point and a half to non-GAAP operating margin on a sequential basis. (To know more about income statement, read: Understanding The Income Statement.)
Read the full piece here:
http://stocks.investopedia.
Tuesday, August 30, 2011
Investopedia: Aruba Still Wired On Growth
How much more needs to be said about the state of enterprise IT spending? Companies like Cisco (Nasdaq:CSCO), Riverbed (Nasdaq:RVBD), F5 (Nasdaq:FFIV) and Juniper (Nasdaq:JNPR) have all had their challenges and setbacks, leading many investors to reevaluate the health of the tech sector and reset valuations much lower. What seems to be evident in Aruba Networks' (Nasdaq:ARUN) earnings, though, is that there is still money out there for IT - perhaps not as much as a year ago, but enough that companies will still spend on the products they see as important to their operations.
A Solid Close to the Fiscal Year
Aruba announced that fiscal fourth quarter revenue rose 47% compared to last year and almost 8% compared to the fiscal third quarter. Management did not give a lot of specificity regarding where revenue came from, other than to say that U.S. results were stronger than in Europe (not a surprise) and that the strongest markets were "general enterprise" and education (a minor surprise). In response to a question on the conference call, management indicated no particular weakness in the financial sector - a surprise perhaps given NetApp's (Nasdaq:NTAP) recent comments.
Read the full piece at Investopedia:
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A Solid Close to the Fiscal Year
Aruba announced that fiscal fourth quarter revenue rose 47% compared to last year and almost 8% compared to the fiscal third quarter. Management did not give a lot of specificity regarding where revenue came from, other than to say that U.S. results were stronger than in Europe (not a surprise) and that the strongest markets were "general enterprise" and education (a minor surprise). In response to a question on the conference call, management indicated no particular weakness in the financial sector - a surprise perhaps given NetApp's (Nasdaq:NTAP) recent comments.
Read the full piece at Investopedia:
http://stocks.investopedia.
Tuesday, August 2, 2011
Investopedia: New Hope At Broadcom
Calling bottoms and turnarounds is a tricky business, but it does not seem so outlandish to still be positive on Broadcom (Nasdaq:BRCM) at these levels. Certainly there are competitive risks, but what semiconductor company exists in a competition-free environment? Likewise, there is also the risk that this lull in the cycle lasts longer than the companies themselves expect, but the long-term valuation here looks compelling even if near-term results are not superb.
Signs of Life in Q2
Broadcom's first quarter results were not very good and still the best that can be said about the second quarter is that it was meaningfully "less bad" as opposed to really better. Revenue decli ned again, but this time the sequential drop was just 1% (and revenue was up 12% from last year). The best performer in the group was the mobile and wireless, even though weakness in other segments results. Broadband and communication was down 4%.
Profitability is still a concern, however. Gross margin did pick up about 70 basis points from the first quarter, but dropped 120 basis points from last year. Likewise, operating income was not strong on an annual comparison, dropping over 26% (and weak sequentially as well). Broadcom isn't stinting on R&D during this downturn, but the big jump in SG&A is a reason for pause.
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Signs of Life in Q2
Broadcom's first quarter results were not very good and still the best that can be said about the second quarter is that it was meaningfully "less bad" as opposed to really better. Revenue decli ned again, but this time the sequential drop was just 1% (and revenue was up 12% from last year). The best performer in the group was the mobile and wireless, even though weakness in other segments results. Broadband and communication was down 4%.
Profitability is still a concern, however. Gross margin did pick up about 70 basis points from the first quarter, but dropped 120 basis points from last year. Likewise, operating income was not strong on an annual comparison, dropping over 26% (and weak sequentially as well). Broadcom isn't stinting on R&D during this downturn, but the big jump in SG&A is a reason for pause.
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Friday, June 24, 2011
Investopedia: Now May Be The Time For Jabil
There are plenty of valid reasons to take one look at an EMS provider like Jabil Circuit (NYSE:JBL), Flextronics (Nasdaq:FLEX) or Celestica (NYSE:CLS) and not bother again. After all, this is a highly cyclical market where the companies have minimal control over their own revenue, narrow margins and returns on capital that arguably do not cover their cost of capital.
And yet, savvy investors realize that there may be a time and place for almost any stock. With the tech market in the doldrums and several major customers gasping, Jabil should be in rough shape. Oddly enough, the company is doing relatively well and may in fact be worth a look from investors who understand that this would not be a permanent engagement.
Decent Third-Quarter Performance
Third-quarter results at Jabil were not too bad, particularly given the weakness at customers like Research In Motion (Nasdaq:RIMM) and Cisco (Nasdaq:CSCO). Revenue rose 22% from the year-ago level, and 8% from the prior quarter, surpassing the consensus estimate by almost $100 million. Growth was strong in the Enterprise and Infrastructure and Diversified Manufacturing Services units, and those offset weakness in High Velocity Systems.
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And yet, savvy investors realize that there may be a time and place for almost any stock. With the tech market in the doldrums and several major customers gasping, Jabil should be in rough shape. Oddly enough, the company is doing relatively well and may in fact be worth a look from investors who understand that this would not be a permanent engagement.
Decent Third-Quarter Performance
Third-quarter results at Jabil were not too bad, particularly given the weakness at customers like Research In Motion (Nasdaq:RIMM) and Cisco (Nasdaq:CSCO). Revenue rose 22% from the year-ago level, and 8% from the prior quarter, surpassing the consensus estimate by almost $100 million. Growth was strong in the Enterprise and Infrastructure and Diversified Manufacturing Services units, and those offset weakness in High Velocity Systems.
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Wednesday, May 25, 2011
Investopedia: Guidance Sours High-Flying Aruba
Even though the actual numbers do not support it, it feels like the markets have been down at least 1% every day for weeks. Whether this is just another example of enough people buying into "Sell in May and go away" that it becomes self-fulfilling or not, the reality is that the market is in a shoot-first mood.
When Aruba Networks (Nasdaq:ARUN) gave cautious guidance with its fiscal third-quarter report, it was tantamount to painting a bullseye on the derrière of shareholders and the market punished the stock in due course. With the dust starting to settle a bit, though, it is time to ask whether the long-term growth potential of this name merits the attention of risk-tolerant growth investors.
On its Own, Not a Bad Fiscal Third Quarter
In a vacuum with respect to guidance and expectations, Aruba's third quarter was pretty strong in many respects. Revenue rose 53% and surpassed estimates by more than the usual degree. Growth was again led by product revenue (up 58%), though 3% sequential growth in the U.S. is a bit of a concern - particularly in light of that softer guidance.
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When Aruba Networks (Nasdaq:ARUN) gave cautious guidance with its fiscal third-quarter report, it was tantamount to painting a bullseye on the derrière of shareholders and the market punished the stock in due course. With the dust starting to settle a bit, though, it is time to ask whether the long-term growth potential of this name merits the attention of risk-tolerant growth investors.
On its Own, Not a Bad Fiscal Third Quarter
In a vacuum with respect to guidance and expectations, Aruba's third quarter was pretty strong in many respects. Revenue rose 53% and surpassed estimates by more than the usual degree. Growth was again led by product revenue (up 58%), though 3% sequential growth in the U.S. is a bit of a concern - particularly in light of that softer guidance.
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http://stocks.investopedia.
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