Aruba Networks Returns From Vacation

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

After taking a break last quarter, Aruba Networks (Nasdaq: ARUN  ) is returning to its earnings-rallying days. Shares are enjoying their time in the sun today, with the stock up as much as 18% today as of this writing after the wireless network equipment provider served up strong fourth-quarter results to finish off its fiscal year last night.

Fourth-quarter revenue tallied up at $113.8 million, jumping 47% from last year's $77.3 million, resulting in non-GAAP earnings per share for the quarter of $0.17. Revenue beat the Street's consensus estimate of $109.2 million while EPS was right on target.

The full-year picture is just as rosy: $396.5 million revenue, a 49% increase, turning into non-GAAP EPS of $0.59. Last quarter's concerns about gross margins should be alleviated, ticking up to 68.5% from 67.7%. The full-year gross margin showed even more of an improvement, rising to 69.1%.

Aruba CEO Dominic Orr cited growing market share at the expense of primary rival Cisco Systems (Nasdaq: CSCO  ) , as well as a rapidly growing enterprise wireless LAN market, during the company's conference call with analysts. Total customer count grew by more than 1,500 -- a quarterly record -- to more than 15,500. The solid results are also attributed to particular strength in the enterprise and educational segments.

Valuation looks a little stretched with the company trading at 45 times free cash flow, compared with fellow networker Riverbed Technology's (Nasdaq: RVBD  ) 27.4 and Cisco's 9.7, although there's a reason Cisco is cheap. This is the first full year the company has delivered a GAAP net profit, which is encouraging. I like where the company is going; I just wish the shares weren't quite so expensive.

Fool contributor Evan Niu owns shares of Riverbed Technology, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Fool owns shares of and has created a bull call spread position on Cisco Systems. Motley Fool newsletter services have recommended buying shares of Cisco Systems and Riverbed Technology. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1544947, ~/Articles/ArticleHandler.aspx, 10/20/2016 6:02:02 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,162.35 -40.27 -0.22%
S&P 500 2,141.34 -2.95 -0.14%
NASD 5,241.83 -4.58 -0.09%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
ARUN.DL $0.00 Down +0.00 +0.00%
Aruba Networks CAPS Rating: **
CSCO $30.16 Down -0.19 -0.63%
Cisco Systems CAPS Rating: ****
RVBD.DL $0.00 Down +0.00 +0.00%
Riverbed Technolog… CAPS Rating: *****