SolarWinds gains; Jefferies sees 20% or higher license growth

Jefferies' Aaron Schwartz has upped his SolarWinds (SWI +2.7%) PT to $57 from $51, and calls the company's EPS/free cash flow upside "underappreciated" at a valuation of 16x FCF.

Schwartz foresees the systems management software firm delivering 20% Y/Y license growth in "a baseline scenario," and thinks sales hiring, cross-selling, and higher transaction volumes could yield upside.

SolarWinds has moved higher since posting a Q4 beat (featured 20% license growth) and solid guidance a month ago. Earnings disappointments led shares to underperform in 2013, after entering the year carrying steep multiples.

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