Yesterday, 3:38 PM
- With shares of "mature" networking hardware vendors such as Cisco having performed better in 2014, Guggenheim Securities' Ryan Hutchinson thinks investors "should revisit growth companies, around which sentiment has been negative."
- Hutchinson, who just launched coverage on the industry, argues tech trends favor smaller, faster-growing, firms with differentiated products, and thinks the recent acquisitions of Riverbed and Aruba Networks kickstarted a new wave of M&A. "New technologies, architectures, and delivery models are disrupting traditional business models ... These include cloud computing, software-defined architectures, network function virtualization, white-box hardware, and open-source software ... We are neutral on the data networking and communications space ... but there are hidden gems to be found; we recommend secular share gainers."
- His top picks are application delivery controller leader/security upstart F5 (FFIV - $130 target), carrier/enterprise Wi-Fi vendor Ruckus (RKUS - $15 target), and DNS/IP address management hardware vendor Infoblox (BLOX - $30 target).
- Hutchinson argues F5's "stable core ADC growth and strong cash flow generation, combined with expansion into adjacent service provider and security verticals should drive the stock price higher." He adds there's more room for F5 to gain ADC share due to Cisco's exit, and considers shares inexpensive at 11x forward free cash flow.
- He notes Ruckus is the #2 U.S service provider Wi-Fi vendor behind Cisco, and will be #3 in enterprise Wi-Fi once the HP/Aruba deal closes. [W]e believe RKUS is well positioned for organic growth and total addressable market (TAM) expansion with new product additions; becoming an increasingly attractive takeover target."
- Infoblox is expected to benefit from new management, a rebuilt DDI appliance pipeline, and growing security attach rates. "[W]e believe BLOX is successfully executing on its transformation from a 'nice to have' to a line item in IT budgets; we believe the company can generate growth at or above 20%."
- Previously: F5 bulls eye security, mobile growth after sales miss
- Previously: Deutsche upgrades Infoblox, sees a cloud play
Tue, Mar. 10, 3:10 PM
- With the Nasdaq down 1.4%, a long list of tech names are posting major declines. Meanwhile, only a handful of tech companies are up more than 2%.
- Notable decliners include hard drive giant Seagate (STX -4.4%), VoIP service/app provider magicJack (CALL -5.6%), telecom equipment maker Comtech (CMTL -8.8%), flash controller IC vendor Silicon Motion (SIMO -5.2%), Wi-Fi hardware vendor Ruckus (RKUS -8.7%), online ad retargeting platform Criteo (CRTO -5.1%), haptic tech developer Immersion (IMMR -6.4%), supercomputer maker Cray (CRAY -4.6%), online coupon code provider RetailMeNot (SALE -5.5%), and solar plays JinkoSolar (JKS -5.6%), Daqo (DQ -9.8%), and Enphase (ENPH -8.9%).
- Immersion has more than given back the Monday gains it saw after Apple, which relies on a proprietary haptic solution that some think infringes on Immersion's IP, unveiled a 12" retina MacBook with a pressure-sensitive trackpad. Solar stocks are reversing course after rallying in recent weeks with the help of good earnings news and YieldCo hopes.
- Previously covered: Cybersecurity stocks, Canadian Solar/ReneSola, Qihoo, Electronic Arts
- Notable gainers: Nvidia, MicroVision, Energous, Weibo
Mon, Mar. 2, 11:19 AM
- Up sharply last week following a Bloomberg report stating HP is in talks to buy Aruba Networks, Ruckus (RKUS -4%) has sold off after HP and Aruba officially announced the deal this morning.
- HP's purchase price ($3B, or $24.67/share) is slightly below Aruba's Friday close, albeit well above where Aruba traded before Bloomberg's report came out.
- Meanwhile, Ruckus has used the Mobile World Congress to announce its 802.11ac carrier Wi-Fi tech is being integrated into partner Nokia's (NYSE:NOK) small cell 3G/4G base stations. Nokia will begin offering the solution later in 1H15. It comes as Qualcomm rolls out chips supporting the use of unlicensed 5GHz. spectrum (used for Wi-Fi) to offer 4G services via small cells.
Fri, Feb. 27, 12:48 PM
- Ruckus Wireless (RKUS +4.2%) is up strongly after enterprise/carrier Wi-Fi hardware rival Aruba beat FQ2 estimates and (in spite of uncertainty about the near-term impact of the FCC's E-Rate school broadband program) provided in-line FQ3 guidance.
- Ruckus is up 12% since Bloomberg reported on Wednesday HP is in talks to buy Aruba, sparking hopes someone else might make a bid for Ruckus. Stifel has argued Cisco is a possibility.
Wed, Feb. 25, 3:16 PM
- Bloomberg reports HP (HPQ -10.1%) is in talks to acquire enterprise Wi-Fi hardware/software provider Aruba Networks (ARUN +22.5%), and that a deal could be announced as soon as next week. Aruba has skyrocketed on the report, and has taken rival Ruckus (RKUS +4.7%) higher with it. Aruba's market cap is now around $2.5B.
- Aruba is the enterprise Wi-Fi market's #2 player - behind Cisco (NASDAQ:CSCO), which towers over the space - and HP is also in the top-5. IDC estimates Cisco, Aruba, Ruckus, and HP respectively had Q2 2014 enterprise Wi-Fi shares of 46.8%, 11.8%, 6.2%, and 4.5%.
- HP, whose shares have plunged today due to an FQ1 revenue miss and soft guidance, saw its total networking revenue drop 11% Y/Y in FQ1 - "execution issues" in the U.S. and China were blamed. The IT giant has suggested it's open to making enterprise acquisitions ahead of its PC/printing spinoff.
Fri, Feb. 20, 12:38 PM
- optionMONSTER's Jon Najarian has given Ruckus (RKUS +6%) a favorable mention on CNBC's Fast Money, adding the company to his Halftime Portfolio. Shares have spiked towards $11.50.
- The carrier/enterprise Wi-Fi hardware provider is now up 9% from where it traded before missing Q4 revenue estimates and offering soft Q1 guidance on Feb. 10.
Thu, Feb. 12, 11:03 AM
- Cisco (NASDAQ:CSCO) beat FQ2 estimates on the back of 8% Y/Y product growth (aided by favorable comps), offered in-line guidance (better than feared, given forex pressures), and reported a 5% increase in product orders. Enterprise, SMB, and public sector orders respectively rose 10%, 8%, and 7%, and service provider orders dropping 1% (compares with a 10% FQ1 service provider drop).
- Cisco still isn't modeling a rebound in service provider or emerging markets demand for several quarters, and forecasts global service provider capex will be down by a mid-single digit % in 2015. But it's more optimistic about enterprise, public sector, U.S., and EMEA demand.
- Telecom and networking equipment vendors, many of whom have been hit hard by capex pressures, are rallying following Cisco's numbers, as are a couple of component/chip suppliers. The Nasdaq is up 0.7%.
- Notable gainers include Alcatel-Lucent (ALU +4.7%), Aruba (ARUN +3.4%), Ruckus (RKUS +5.1%), Sonus (SONS +3.4%), Extreme Networks (EXTR +3.4%), Brocade (BRCD +1.9%), Adtran (ADTN +3%), Infoblox (BLOX +2.7%), Finisar (FNSR +2.1%), Cavium (CAVM +2%), Ixia (XXIA +1.9%), and Mavenir (MVNR +3.4%).
- Cisco's 18% Y/Y wireless product sales growth appears to be going over well with Aruba and Ruckus investors, and its 11% switching growth with Extreme and Brocade investors.
Tue, Feb. 10, 5:41 PM
- In addition to missing Q4 revenue estimates (while posting in-line EPS), Ruckus (NYSE:RKUS) is guiding for Q1 revenue of $84M-$87M and EPS of $0.08-$0.09, below a consensus of $89.9M and $0.11.
- 14 new service provider end-customers were added in Q4, down from 20 in Q3; the base is now above 200. ~4K enterprise end-customers were added, even with Q3; the base is now above 48K.
- Gross margin was 69.6% vs. 69.9% in Q3 and 67.7% a year ago. GAAP operating expenses rose 13% Y/Y to $55.5M (compares with 18% revenue growth).
- RKUS -5.5% AH to $9.93. Q4 results, PR.
Tue, Feb. 10, 4:08 PM
Mon, Feb. 9, 5:35 PM
Mon, Jan. 26, 11:53 AM
- Citi has launched coverage on Ubiquiti (UBNT -2.9%) and Aruba (ARUN -1.5%) at Neutral, and fellow Wi-Fi hardware vendor Ruckus (RKUS +3.6%) at Buy.
- Ruckus, upgraded recently by Northland Securities, reports on Feb. 10.
- Ubiquiti, which gets a majority of its revenue from non-Wi-Fi products, reports on Feb. 5. Shares tumbled last month following a bearish Goldman launch.
Wed, Jan. 21, 9:37 AM
- Northland Securities has upgraded Ruckus (NYSE:RKUS) to Outperform ahead of its Feb. 10 Q4 report.
- The carrier/enterprise Wi-Fi hardware vendor remains less than a dollar away from its 52-week low of $8.65. Shares go for 16x 2015E EPS and 1.6x 2015E EV/sales; the 2015 revenue growth consensus is at 21%.
Mon, Jan. 12, 11:48 AM
- "Checks suggest that the steps Aruba Networks (NASDAQ:ARUN) has taken to cut costs and optimize sales efficiency may have frustrated some of the sales organization, likely impacting sales execution," writes JMP's Erik Suppiger, downgrading the Wi-Fi equipment hardware vendor to Market Perform.
- The changes include "cutting compensation and raising sales targets for many of the top-performing sales people," something Suppiger thinks may have "impacted morale and demotivated some sales reps."
- His FQ2 and FQ3 estimates have been slightly lowered. Nonetheless, Suppiger still likes Aruba's product positioning, and (given heavy sales hiring) expects the company to "eventually work through" its current issues.
- Rival Ruckus (NYSE:RKUS) is following Aruba lower on a day the Nasdaq is down 0.6%. Aruba is close to its 52-week low of $16.05.
Dec. 22, 2014, 11:15 AM
- OTR Global has lowered its view of Ruckus (NYSE:RKUS) to Mixed from Positive.
- The downgrade comes as service providers begin implementing HotSpot 2.0 (enables automatic login for public/carrier Wi-Fi networks) , long declared by Ruckus (among others) to be a catalyst for driving broader carrier Wi-Fi usage by consumers.
- Time Warner Cable and Wi-Fi provider/Ruckus client Boingo (WIFI +1.1%) have begun using HotSpot 2.0 to allow customers to move between the companies' Wi-Fi networks without having to register or log in.
Nov. 21, 2014, 2:11 PM
- Believing Aruba's (ARUN -13.1%) soft FQ2 guidance reflects tough competition and slowing industry growth, BofA/Merrill has downgraded the enterprise Wi-Fi hardware vendor to Underperform. Its target is $21.
- Dougherty is defending Aruba, arguing 802.11ac adoption will drive growth - the firm notes only ~10% of Aruba's base has migrated. Dougherty also expects share gains (aided by ClearPass and Aruba Instant) and new channel partners to help Aruba's cause, and considers guidance conservative.
- After opening higher, rival Ruckus Wireless (RKUS -6.7%) is following Aruba lower. As is Aerohive, which was downgraded today by Macquarie.
Nov. 13, 2014, 3:28 PM
- Though Cisco is higher after beating FQ1 estimates and issuing soft FQ2 guidance, many telecom equipment and component/chip names are going in the opposite direction.
- At issue: Cisco reported a 10% Y/Y drop in service provider orders (-18% in the U.S.), while stating on its CC (transcript) it "saw dramatically reduced spend at several large U.S. service providers." The networking giant also suggested demand will remain weak during the next couple of quarters.
- The remarks came just a few days after AT&T set a 2015 capex budget of $18B (down from 2014's $21B), prompting a Monday selloff in equipment vendors and their suppliers.
- Today's decliners: ALU -3.8%. CIEN -2.8%. JDSU -3.1%. FNSR -3.7%. JNPR -1.7%. INFN -3.8%. RKUS -3.4%. ZHNE -3.2%. AMCC -4.1%. CALX -2.7%. CYNI -1.8%. ADTN -3.5%. ALLT -2.4%. FN -1.9%.
RKUS vs. ETF Alternatives
Ruckus Wireless Inc provides carrier-class Wi-Fi solutions to service providers and enterprises to solve network capacity and coverage challenges. Its products include gateways, indoor and outdoor access points, and controller software platforms.
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