When elephants dance, the mice around their feet run for their lives. Is there room for specialized network equipment players beyond industry giants Cisco Systems
By the looks of last night's second-quarter report from Aruba Networks
That result compares favorably to Cisco's recently reported 11% annual revenue growth, which was hailed as the best thing since sliced beets. Juniper isn't growing at all, and is -- perhaps unfairly -- blaming American telecoms for its revenue shortfalls.
Aruba CEO Dominic Orr says that his enterprise customers appreciate Aruba's combination of "security, scalability and mobility software." The company is nothing if not opportunistic, and recently introduced military-grade secure connectivity solutions for the entire iEcosystem of Apple
If everything about Aruba is so rosy, then why did shares drop as much as 10.1% on the report? Well, the stock actually held steady overnight but dropped when analyst firm Jefferies reiterated a "hold" rating on the stock with a target price of $22 -- a good deal below Thursday's $22.65 closing price. "We believe the shares are fully valued," said the firm. How's that for a self-fulfilling prophecy, eh?
I disagree with Jefferies. Aruba's growth story is far from over, and my bullish CAPScall stays firmly in place. Management is pulling all the right levers to keep the engines humming. And let's face it -- if you had to pick one subsector of computer networking that shines brighter than all the rest right now, mobility would be it.
Fool contributor Anders Bylund holds no position in any of the companies mentioned. The Motley Fool owns shares of Cisco Systems and Apple. Motley Fool newsletter services have recommended buying shares of Apple and Cisco Systems. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check out Anders' holdings and bio, or follow him on Twitter and Google+. We have a disclosure policy.