Seeking Alpha

Aruba falls on cautious Wells Fargo note; Ruckus also drops

  • Wells Fargo's Jess Lubert thinks Aruba (ARUN -9.8%) will report solid FQ1 results on Thursday, but also thinks its FQ2 guidance might be in-line "in line to slightly below [Wells Fargo's] estimate of $167 million and consensus of $166 million."
  • Lubert is also forecasting FQ2 EPS of $0.15, below a $0.16 consensus. He also thinks the enterprise/carrier Wi-Fi hardware vendor might not meet 2H14 growth and op. margin expectations.
  • Though expecting Aruba to likely "remain confident in its ability to capitalize on enterprise wireless demand and the ramp of new product," but could "express incremental near-term caution due to macro concerns and the need to invest for growth."
  • Enterprise Wi-Fi kingpin Cisco recently reported only 8% Y/Y Oct. quarter revenue growth for its wireless ops, after reporting 32% growth for the July quarter.
  • Rival Ruckus (RKUS -5.8%), which has relatively higher carrier Wi-Fi exposure, also sold off. Shares of both companies have priced in some bad news this year.
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